Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: SmallCap on November 30, 2010, 01:35:00 PM

Title: SD - SandRidge Energy
Post by: SmallCap on November 30, 2010, 01:35:00 PM
There was a good thread going on SandRidge in the general section but instead of putting an update there I decided to put it into the investment ideas section.

Here is the link to the old discussion

http://cornerofberkshireandfairfax.ca/forum/index.php?topic=3270.0


SandRidge came out with a new presentation updated through Nov 1st.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjkxMDN8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 30, 2010, 05:00:21 PM
I am wondering if FFH bought more on November 15th & 16th?

Nov 16, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 2,381,000 Indirect Purchase at $5.08 per share. 12,095,480
Nov 15, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 929,300 Indirect Purchase at $5.15 per share. 4,785,895
Nov 12, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 1,590,500 Indirect Purchase at $5.15 per share. 8,191,075
Nov 10, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 1,250,000 Indirect Purchase at $5.17 per share. 6,462,500
Nov 9, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 230,200 Indirect Purchase at $5.15 per share. 1,185,530
Nov 8, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 1,000,000 Indirect Purchase at $5.15 per share. 5,150,000
Nov 5, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 14,203,600 Indirect Statement of Ownership N/A
Nov 5, 2010 FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Beneficial Owner (10% or more) 14,203,600 Indirect Statement of Ownership N/A

The total holdings, including the converts, must be well over 10% now....

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 09, 2010, 03:34:32 PM
Ward eluded to having the asset sales done during the last presentation. He said it would close Q1.

Here is the first announcement.

http://www.tradingmarkets.com/news/press-release/egn_sd_energen-unit-buys-bone-spring-acreage-in-permian-basin-1359304.html
Title: Re: SD - SandRidge Energy
Post by: Packer16 on December 24, 2010, 11:04:42 AM
Has anyone looked at GMX Resources versus SD?  SD has good gas exposure but appears to have paid a high price to get Arena's oil.

Packer
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 28, 2010, 10:37:40 PM
People keep saying that but SD would likely be taken under had they not switched to oil. Look at their production costs on gas and then look at the current price of gas. Then factor in the high debt load and limited hedges.

I think Ward should get a kudos for saving the company. Gas inmo has suffered a paradigm shift it just isnt worth what it used to be....
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 05, 2011, 03:26:17 PM
It looks like they are monetizing the Mississippian asset. Very interesting. I wonder how this will effect my leaps. I would love to get leaps on the spinoff. I predict production and distributions will grow rapidly (given the 100 wells coming online). If so, so should the SP and options value  :).

If they can get $250 million for 43k net acres then .............

In connection with the offering, SandRidge will convey to the trust certain royalty interests in exchange for the net proceeds from the offering and units representing approximately 50% of the beneficial interest in the trust. The royalty interests will entitle the trust to a percentage of the proceeds received by SandRidge from the production of hydrocarbons from currently producing wells and development wells to be drilled by SandRidge on approximately 42,600 net acres in the Mississippian formation in northern Oklahoma.  SandRidge intends to use the net proceeds from the offering to repay borrowings under its bank credit facility and for general corporate purposes.

http://www.prnewswire.com/news-releases/sandridge-energy-files-registration-statement-for-initial-public-offering-of-royalty-trust-112967074.html

----

http://www.sec.gov/Archives/edgar/data/1349436/000119312511002142/ds1.htm

The 650,000 net acres held by SandRidge in the Mississippian formation represent one of its core assets. SandRidge has grown its position in the Mississippian formation during the last three years based on its belief that the formation can provide significant returns on invested capital and will likely be a key asset in growing its oil and gas production over the next several years. SandRidge estimates that it will have ten rigs operating in the Mississippian formation in the first quarter of 2011. Because of its significant net acreage position in this area, SandRidge expects to focus on developing the Underlying Properties quickly to support the further development of its overall position in the Mississippian formation.

-----

I thought the plan was to stop at 500k. Very Interesting indeed. So far I like it. I think Ward has found a very interesting way to raise capital with regard to the asset. I am really excited about the IDRs. If they can ramp up drilling, the IDRs will mint money. I wonder who came up with the monetization plan. That next presentation on the 11th or so will be rather interesting.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 06, 2011, 06:07:19 AM
Tom Ward is a Genius. Prem Watsa is even smarter for betting on him.

Tom is selling 50% (retaining half of the entity) of less than 10% of the Miss Play for $250 - $300 million.

If 100% of the play is the same thats a value of more than $6 billion for Miss.
If this is the best patch of the play but the other acres are half as good we get $3 billion.

Look at SDs market cap, then keep in mind this is only Miss  ......

More importantly we get a platform. They can ramp up drilling (not sure if possible, he said it would be a logistical problem), prove out the reserve, and sell to the new entity. The new entity can keep selling shares to buy more bits of the play. Production should grow rapidly, dividends will grow rapidly, and eventually we will mint money from IDRs and Dividends. We will still own 50% of the entity.

I am hoping for a flat day and really considering buying deep out of the money 2013 calls.

When it rains - It pours. I am due for a bad day soon, portfolio up 16% in 2 weeks.

-----

Much better than CHK. Note the sale was for cold hard cash, no farm in BS.

-----

I owe T Bone a cut of coffee (well perhaps much more than that). He was the first to really recognize the value in this play. His valuation for 250k acres was spot on.  Shame, I didnt buy more based on his first analysis.

http://cornerofberkshireandfairfax.ca/forum/index.php?topic=2825.msg25583#msg25583
Title: Re: SD - SandRidge Energy
Post by: Tim Eriksen on January 06, 2011, 12:11:09 PM
Myth

While I haven't looked at the details, I would be careful comparing the value for a royalty interest with the value for the whole property.  If it was a working interest your math would make sense, but a royalty interest gets a percentage of revenue without any associated cost, so it is much more valuable. 
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 06, 2011, 12:24:52 PM
Thanks for the tip Tim, you have a good point. I guess the main difference would be we have to develop / prove up those reserves and they get 90% and 50% of the revenue at with no associated costs outside of the $250 million.

I am excited because as they prove up the position they should be able to sell the additional non related production into the platform along similar terms. We retain 50% of the platform, and then get IDRs worth 50% after what I presume will be a very low hurdle rate.

INMO we have retained access to the cash flow, but found a fairly ingenious way to monetize the assets. They also get (my guess here) - The costs of the land, the cost to develop / prove up the land, and a small return all up front. INMO this is the best outcome available and it allows Ward to maintain control without a Major / Semi Major looking over his shoulder.

Thanks again though, you learn a bit each day, and I will have to noodle on this one.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 11, 2011, 06:08:09 AM
Thanks again for your thoughts Tim. Very helpful.

Here is our much awaited for presentations.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDA5NDU3fENoaWxkSUQ9NDE5MzA4fFR5cGU9MQ==&t=1

Ward swings with a big bat. 650k in acre. I wonder when he will stop.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on January 11, 2011, 06:33:13 PM
I thought the goal was 500k. Can't blame him tho, the production #s look very impressive and 100%+ ROR is crazy. I wish I can invest directly there.
Title: Re: SD - SandRidge Energy
Post by: rijk on February 04, 2011, 06:02:37 AM
$5-6 million sign on bonus for the new CFO, or is this an annual allocation?
seems a bit rich but for sure, Mr Bennett has a vested interest, at least the coming 4 years.....

http://www.sec.gov/Archives/edgar/data/1349436/000134943611000105/xslF345X03/edgardoc.xml
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 04, 2011, 07:14:58 AM
$5-6 million sign on bonus for the new CFO, or is this an annual allocation?
seems a bit rich but for sure, Mr Bennett has a vested interest, at least the coming 4 years.....

http://www.sec.gov/Archives/edgar/data/1349436/000134943611000105/xslF345X03/edgardoc.xml

When it comes to SD and CHK, I tend to ignore these things and think happy thoughts. Hopefully he brings that much value but ......

Whats more interesting is the number of rigs and how they plan to hold all that acreage they keep buying. I may buy more once I get my answer.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 04, 2011, 08:35:27 AM
i think the new play is going to be a home run. If it turns out to be anything close to Bakken; seriously, this will be FFH's home run as well.

Prem is wise to have this in his personal account - The Brick had a nice run too ... the only sick child is FBK ...
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 04, 2011, 09:14:17 AM
i think the new play is going to be a home run. If it turns out to be anything close to Bakken; seriously, this will be FFH's home run as well.

Prem is wise to have this in his personal account - The Brick had a nice run too ... the only sick child is FBK ...

I agree and I think Ward will push it to 1 million acre (come on he used to work at CHK). One thing SD is good at is ramping up. When you look at what they did in the Pinion and consider that the stock price got as high as $60 based on increased drilling and nat gas prices. I believe they will do the same with oil, but will hedge the hell out of it this time going out 3-4 years. Then they will severely ramp up drilling.

These guys know how to drill wells. I am gitty like a school girl about this and 3-4 other ideas. It should be an interesting year. I want to double down with 2013 leaps, but just need a few more details about the plan. All should be answered by the next call (how many acres, how many can we hold, how many can you reasonablely sell into the trust platform, whats the plan for the rest, JV or sell or more rigs and unit sells.

---

FBK has a decent chance of being taken out.
ATPG should get a permit one of these days.
ESV has rigs coming online this year when everyone is ordering new rigs.
DO should have some conclusion to the gulf situation at some point.
SSW has new ships coming online and new capital for other projects.

Hopefully some of these work out sooner then later. I would like for FBK to be taken out or ATPG to get a permit. Then I can take some of that capital and put it back into SD. Feb should be a fun month. Though oil has had a nice run and I am sure will suffer a pretty big pullback. Hopefully ATPG and SD are hedging.

ALTIUS MINERALS CORP - Looks interesting as hell.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 04, 2011, 09:47:20 AM
OPTI's 2nd lien bond looks interesting to me as well.
MTM 1.7EV - if they files, the 2nd lien will likely become commons.... if they finally ramp up as it restructure.. will be very interesting play.
Title: Re: SD - SandRidge Energy
Post by: QLEAP on February 07, 2011, 07:19:10 AM
Bumped to 750K acres, 11 rigs  and 274 Boe/d :)

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDEyNTc0fENoaWxkSUQ9NDIzNTA1fFR5cGU9MQ==&t=1
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 07, 2011, 07:54:48 AM
Bumped to 750K acres, 11 rigs  and 274 Boe/d :)

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDEyNTc0fENoaWxkSUQ9NDIzNTA1fFR5cGU9MQ==&t=1


We are going to need more rigs than that. Today is an interesting day, news all around with several holdings. I cant wait to hear the audio.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 07, 2011, 08:16:30 AM
I am very happy with the recent moves Ward has made. It should be very interesting going forward to see what he does with all the extra acerage. I hope he holds on to it and either increases the size of the royalty trust or JV with another company. Oil, gas or both - he has now positioned the company for whatever lies ahead!

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: bathtime on February 07, 2011, 11:08:10 AM
A local news story on SD presenting to the community:

http://news.mywebpal.com/news_tool_v2.cfm?show=localnews&pnpID=348&NewsID=994958&CategoryID=7227&on=1

"SandRidge has leases on more acreage than it can possibly drill in the length of the current lease, Kirtley emphasized Thursday, and said SandRidge will contract or otherwise involve outside companies or in the drilling process."
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 07, 2011, 12:09:34 PM
I am very happy with the recent moves Ward has made. It should be very interesting going forward to see what he does with all the extra acerage. I hope he holds on to it and either increases the size of the royalty trust or JV with another company. Oil, gas or both - he has now positioned the company for whatever lies ahead!

cheers
Zorro

I think we have to JV or buy more rigs. I would like him to pull a CHK and do a JV where they pay us cash to deliver and pay 1/3 - 2/3 drilling costs. Im excited and really should have bought more. I may once I hear the audio feed. Zorro where do you peg value at and are you buying more. I know north of here but was waiting for the 10k to pin a number on it.

I think 2013 leaps are very attractive though I dont want to pay the premium.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 07, 2011, 01:44:39 PM
Myth,

I did a quick & dirty spreadsheet to come up with some projections. I tried to keep everything reasonable, except for 2014 where I did a little daydreaming. I kept oil prices at $85 per barrel and show steady increases in production, I have kept gas production constant (again except for 2014) & kept interest and admin costs constant at 2010 levels. Over all by 2013 SD could be making $2/per share. SD has a lot of potential with steady prices and even more if you think oil and gas prices can go higher.  Not sure what the ultimate target price should be but I am confident it is a lot higher than where it is today. Ward holds a lot of shares and has both money & reputation on the line. Let me know what you think of the projections…..

Sandridge projection 2011 to 2014                                                      
Year            2011      2012      2013                               2014   
                           
oil production in barrels      40000      55000      70000                             85000   
natural gas in
 billions of cubic feet       112 $4.50   112  $4.75    112   $5.00                       150  $8.50
Revenues:                           
oil production      $1,241,000,000      $1,706,375,000   $2,171,750,000      $2,637,125,000   
natural gas      $504,000,000      $532,000,000   $560,000,000      $1,275,000,000                                             
Total revenues      $1,745,000,000      $2,238,375,000   $2,731,750,000      $3,912,125,000   
                           
Less operating costs:                           
production costs      $297,840,000      $409,530,000   $521,220,000      $632,910,000   
depreciation & amortization   $523,500,000      $671,512,500   $819,525,000      $1,173,637,500   
interest charges      $258,000,000      $258,000,000   $258,000,000      $258,000,000   
administration costs   $165,000,000      $165,000,000   $165,000,000      $165,000,000   
income taxes      $0         $0      $0         $0   
                           
Total expenses      $1,244,340,000      $1,504,042,500   $1,763,745,000      $2,229,547,500   
                           
Less preferred stock dividends $34,526,000      $34,526,000   $34,526,000      $34,526,000   
                           
Net income for shareholders   $466,134,000      $699,806,500   $933,479,000      $1,648,051,500   
Per share         $1.02         $1.54      $2.05         $3.62   

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 07, 2011, 01:47:12 PM
The table looked okay in preview so I am not sure what I did wrong.....anyone, help please!

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 08, 2011, 12:41:39 PM
Your numbers look very reasonable but inmo anything could happen with Net Income / CF. I believe this is and has always been an asset play. Ward confirmed it today, he said FCF will come with asset sales.

I want to get the proved numbers from the 10k and then do some basic valuations on the Miss play. Right now we have too many moving parts and are selling assets every quarter.

Ward said a number of key things which got me excited.

1. As suspected he is up to $1 million acres.
2. Again can only hold 250,000 with 10 - 11 rigs.
3. Noted that he believes on a whole the acreage is the same or similar throughout and has the best economics.

4. Will likely do more royalty trusts. As discussed earlier the cash up front makes this the best way to raise capital and provides a higher NPV vs. a JV. He doesnt think they can trust it all though. I am not sure why but probably because they likely have to sell producing reserves with the promise to drill new wells.

5. Will likely see a JV or true asset sell at some point for the remaining acre.

---

Ward did this with SD originally and shares hit $60 on strong natural gas and drilling results. He found a nice field to drill and focused on it. Then the bottom feel out of gas. He basically bet on the wrong horse and is now doing it with oil. This time I believe he will hedge more, he knows a slow down here or in China will kill oil prices.

Finally he said on the Trust deal about $110 million was for 10,000 acres. The rest was for PDP and future drilling. Thats a very interesting value for the play if I heard correctly.

Interestingly enough he doesnt see gas coming back anytime soon. I agree.

I plan to rotate some of my flat ATPG leaps into SD. Just have to figure out which ones to buy on the 2013.
Title: Re: SD - SandRidge Energy
Post by: bathtime on February 09, 2011, 08:12:39 AM
Fwiw, some skeptical takes on SD from an energy investor board when I asked about it:

----

Zman: I've taken a hiatus from the name until they make some guidance numbers and deliver on promises. Easier names to follow. I think the value is probably there long term but I don't feel a need to catch the bottom so am not watching it closely. Name has completely facelifted over the last year (was a Pinon Gas play, now a Permian oil play). Probably ought to pay more attention and will look at the presentation but I'm in the fool me twice, three times, etc camp there at the moment.

----
jiveyjr: re: SD…I'm expecting it to encounter resistance 8.45-8.50…I'm selling all but just a small piece of mine there….been a long, long frustrating hold for me….

---
Zman: no, the [Mississippian] well control out there should be extensive, not a problem with that, more an issue with management. The story got complex and overly leveraged to gas and under hedged and a lot of things went wrong. Management has experience but the CFO we liked quit, I don't know anything about the new guy and yet Ward continues to be pretty well paid. And has not, last I checked met a recent production goal. I probably ought to go have another look at it. 

---

BOP: SD — it's like the Boy Who Cried WOLF…. or LION…. or ZOMBIE… or BIG FOOT… or GIANT TOMATOES….
 
Someday, something will show up at SD's door… they just keep changing the HYPE and the STORY on a rolling basis.  People just got a little weary… well, that, and a leveraged balance sheet peppered with accounting shenanigans and hedging swings.  But SOMEday — if they live long enough — SOMEthing will indeed show up at SD's door.

---

Zman: Bath – also part of that is me. I'm cold on SD right now and I don't feel the need to chase all the girls which is just the way I operate. It means I miss some moves but I do look at a lot of names and if I see a compelling reason to take a closer look I'm start working it up. 

---

jiveyjr Says:
Bill should chime in on SD…he and I were the two longest holding bagholders in the name…I kept holding but think Bill just had enough a few months ago….
lots of people hate companies run by people that build big real estate edifices to aggrandize themselves and pay themselves heavily when shareholders are so under water….once in the doghouse it takes a while for investors to forget

----
Bill says:
Regarding SD, I lost confidence in Ward and sold. I bought too high and sold too low. They are pretty good with the hype and ward hasnt met a forecast in 4 qtrs.

Problems as I see it
1. Their debt is out of control.
2. Operating costs too high– sd acknowledges cost per boe is 73 to $ 80 per boe
3. Too many idled assets that they refuse to sell.
4. Ward compensation and oversight corporate governance at sd. He gets more shares when the stock dives, bonus is fixed
5. Move to oil good, but he hedged too low. based on his number released yesterday he is under water by 200-250 m. This hasnt gone thru the PL yet–Yeah I know non cash but people wont be expecting another loss this qtr. ie headline risk
6. New cfo would be a dolt if he didnt clean up the balance sheet lets throw some more one time asset impairments for the non productive ng assets to the mix and it should be an ugly qtr.
7. Ignoring all the one timers, if they presold at 86 and their cost is 80 they make 6 bucks a boe times 9 m = 54 m pre tax 500 m shares = 10 cents …—$ 8.25 stock for 10 cents of earnings
8. i wish one analyst would ask why he is losing money qtr after qtr if he makes 100 % Irr on his wells
I have to conclude there are better values elsewhere. Im buying puts pre earnings
----



Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 09, 2011, 09:09:28 AM
All of those comments are true. Just about everyone of them. Half the people are pissed off about how he handled the gas run up. The other half are pissed off that he learned his lesson and is doing better on the oil run up (hedges, asset sells, low costs).  ;)

I would be annoyed if I bought at + $10 - $20 or so and sold at $5. Basically those who bought with $10 plus gas expectations got hosed. SD's numbers are a mess but they are turning things around. My only issue is I have no way to effectively model cash flow due to all the sales, screwed up balance sheet, and total change in strategy. SD has assets (which everyone agrees are worth more than the current sale price), and cash to drill so I believe things will improve. You dont bring on that many wells and not see improvement.

Ward is an overpaid wildcatter oil man, but while people were complaining about him diluting us out of gas assets he was staging a turn around 2-3 years before everyone else. He probably saved the company and if you listen to any nat gas company all you will hear about is the move to liquids / wet gas (except for MCF). Ward was 2/3 years ahead of the curve.

He sold oil he got cheap high (those acquisitions were quite cheap), and bought more cheap oil (miss). I think his plan was good, though was aggressive. He got killed due to a lack of hedges and gas going from $10-$14 to around $4. They are a high cost gas producer due to CO2 and debt. I dont see the bottom falling out of oil, and we will have hedge losses because he has learned his lessons. They will drill, hedge, sell / jv, and drill and hedge.

Thats what I want to see. This happens in every stock. People buy, get hosed for 2-4 years, and cant move past it. It happened to me in several names (I will never look at KSP or USMO). Anyone who bought SD at $5 or so has made a killing, and I hope anyone who bought at $8-9 will make a killing. I just swapped half my position to 2013 leaps and out of 2012s. I went in the money for $5 options (have limited confidence in cash flow).

Quarterly numbers for the next 2 - 3 quarters will be absolutely brutal. They are right about that. If I was CFO I would write off anything and everything though Ward wouldnt like that. Also Ward seems to know value - I dont know why they need $100 million of land and building for the new head quarters but he thinks it will make money once its all built up. I had my doubts on the miss play, and will simple give him the benefit of the doubt with the office space.

He is overpaid but outside of Prem, Buffett, and a handful of other guys who isnt? They will ramp up to some ungodly production number via JVs and asset sells. The converts will convert, and the remaining debt will be refinanced. If Ward finds some other cheap oil he will take on a crap load of debt to get his hands on it at cheap prices.

It will be a bumpy ride but you have to ask yourself one question. Do you feel lucky punk? No not that, do you believe in a world of high volatility but overall, over the long term rising oil prices (and perhaps gas). If so I think SD is the best way to play it (outside of an explorer who can explore). They delivered on gas, just the bottom fell out. If you think it will happen with oil then I would move along.

Do me a favor. Please let me know what these guys think about ATPG, ESV (with the merger), and DO.

----

Interesting link.

http://www.youroilandgasnews.com/osage+gives+details+on+its+7,000%2B+acre+land+position+in+the+nemaha+ridge+horizontal+mississippian+play+in+oklahoma_59216.html
Title: Re: SD - SandRidge Energy
Post by: bathtime on February 09, 2011, 09:23:06 AM
Thanks, Myth. Like Don Coxe says, could be a case of those who know it most love it least (and miss the value).

Darn, I was looking at Osage on Friday when researching possible small cap plays, missed the one day quadruple.  :) Their acreage is outside SD's perimeter map, which is why I didn't look more closely, but Ward did indicate yesterday that there was prospectivity outside the perimeter.

Here's a thread with landmen comments on the Mississippian activity from a Sooners board:

http://www.landthieves.com/forums/viewtopic.php?f=12&t=2726

I'll see what I can find out for you on your other picks.

Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 09, 2011, 09:36:33 AM
Thanks for the link.

I really need to make time for the o&g small caps. Seems like every other day one of these is going gangbusters.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 12, 2011, 08:10:44 AM
Just in case you don't have enough to read, SD has filed for the royalty trust......

http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=IROL-secToc&TOC=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTEtMDI5MTIzL3RvYy9wYWdl&ListAll=1

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: brker_guy on February 15, 2011, 11:39:34 AM
Looks like Mr. T Boone Pickens also loaded up on SD last quarter:

http://www.bloomberg.com/news/2011-02-14/bp-capital-management-largest-holdings-in-4th-qtr-13f-alert.html?cmpid=yhoo
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 17, 2011, 12:31:31 PM
I was able to push out half my leap portfolio last week, just in time. Now about 50 / 50 2012 and 2013.

This feels a bit too fast though. New 52 week high. I dont think earnings will be good, hopefully the guidance is useful. Any idea why we are running? Just more people getting the news?

http://www.marketintelligencecenter.com/newsbites/1253277
Title: Re: SD - SandRidge Energy
Post by: mevsemt on February 17, 2011, 12:35:39 PM
SD's recent run made me nervous too, and I sold my 2012 LEAPS last week (here's the link: http://mevsemt.blogspot.com/2011/02/sold-sd-call-options.html).  Right now it seems like the common is the better risk/reward IMHO although I don't own any...
Title: Re: SD - SandRidge Energy
Post by: nodnub on February 17, 2011, 12:45:02 PM
SD's recent run made me nervous too, and I sold my 2012 LEAPS last week (here's the link: http://mevsemt.blogspot.com/2011/02/sold-sd-call-options.html).  Right now it seems like the common is the better risk/reward IMHO although I don't own any...

nice blog name  :)
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 17, 2011, 12:49:36 PM
Thanks for the link. Our positions were / are about the same size though you have done a bit better my cost was $1.6 all in after tax loss sells of a smaller holding of the $7.5. I am up around 200% on my initial purchases. This is a tough one for me. I knew SD was worth more than $5 and more than $7.50 but never set an upper bound due to all the noise, acquisitions, write offs, and switching from oil to gas.

Now we have MISS coming into the valuation which wasnt even on the radar when I bought. I think he has hit a home run with that play and could make some serious coin by selling it or and even more by proving it out. I dont want to leave money on the table but dont want to loose my gains.

Its a tough situation. Volume is huge also. I think people are waking up to the investment. With the trust you basically put a value on the entire acrage position.

On the other side of the coin this rally is running on fumes and raising oil, energy, and commodity prices will break the back of this fickle recover. I think this and ATPG are a good way to play oil, which is why I pushed out half the leap position. Why have you sold the leaps while considering the common. I dont have a huge chip stack so leaps are a way to get low risk leverage for me. Just have to get the timing right.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 17, 2011, 12:55:34 PM
SD's recent run made me nervous too, and I sold my 2012 LEAPS last week (here's the link: http://mevsemt.blogspot.com/2011/02/sold-sd-call-options.html).  Right now it seems like the common is the better risk/reward IMHO although I don't own any...

nice blog name  :)

I just got the blog name. I like your leap stategy. Reminds me of mines  ;D. Hopefully for me yours is a good one.
Title: Re: SD - SandRidge Energy
Post by: mevsemt on February 17, 2011, 12:59:34 PM
Why'd I sell the LEAPS while considering the common?

As the stock appreciated toward my GUESS of its fair value (somewhere in the teens) the margin of safety eroded.  With a smaller margin of safety I'd feel more comfortable in a less leveraged investment (i.e. common vs. LEAPS).  In other words, I was primarily focused on the downside...
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 17, 2011, 01:05:40 PM
Why'd I sell the LEAPS while considering the common?

As the stock appreciated toward my GUESS of its fair value (somewhere in the teens) the margin of safety eroded.  With a smaller margin of safety I'd feel more comfortable in a less leveraged investment (i.e. common vs. LEAPS).  In other words, I was primarily focused on the downside...

Aw that makes sense. Perhaps I should do the same, I will have to run some return calculations to see at what point its worth letting some go.

I finally understand Soros. As the market increases I get a bit more frantic each day, similar to his back hurting. I am going to have to take gains sooner or later to stay sane.
Title: Re: SD - SandRidge Energy
Post by: mevsemt on February 17, 2011, 01:14:12 PM
Ha!  This is what keeps me up at night...

http://mevsemt.blogspot.com/search/label/zz%20Sears
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 17, 2011, 01:34:07 PM
Ha!  This is what keeps me up at night...

http://mevsemt.blogspot.com/search/label/zz%20Sears

Lol. I sleep sound during selloffs as long as I have cash. I have been watching Sears for 2 years, cant figure out what they hell they are up to, but im 80% confident it will work and has something to do with a short squeeze.

I would buy but I need to have something to hang my hat on and Sears provides an awful shopping experience and has ugly stores.

Interesting.
Title: Re: SD - SandRidge Energy
Post by: Bronco on February 17, 2011, 02:20:52 PM
Myth - let me get your thoughts on oil / nat gas.  Seems like anything resource is doing well now - cotton, corn, oil (not nat gas), copper, gold, etc.

Do you think this is cyclical or a long-term trend?  Have we reached a critical point in population and economic growth where demand is outstripping supply?  Or is it a matter of bad policies (US - nat gas and corn)? 

Does it make sense to own the owners of natural resources - especially if prices fall?  Buy and hold forever? 

Just thinking out loud.  My personal opinion is that some things will be in constant heavy demand (oil) while others like corn and wheat could be resolved. 


Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 17, 2011, 08:15:33 PM
guys, remember most think they are investment gurus in a bull market.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 18, 2011, 02:26:52 AM
Myth - let me get your thoughts on oil / nat gas.  Seems like anything resource is doing well now - cotton, corn, oil (not nat gas), copper, gold, etc.

Do you think this is cyclical or a long-term trend?  Have we reached a critical point in population and economic growth where demand is outstripping supply?  Or is it a matter of bad policies (US - nat gas and corn)? 

Does it make sense to own the owners of natural resources - especially if prices fall?  Buy and hold forever? 

Just thinking out loud.  My personal opinion is that some things will be in constant heavy demand (oil) while others like corn and wheat could be resolved. 




I think alertmeipp, has the right idea. I feel like a duck in a rising pond.

I am long term bullish on oil and agree with Grantham and Rogers. I think we are running out of resources which means rising prices. Now though in my opinion is a very bad time to be getting into oil and probably a great time to be taking profits. INMO you cant have a recovering world wide economy with sky high commodity and food prices. Something has to give. Consumers all around the world are getting squeezed.

I dont think you can hold commodities are anything else for that matter forever.
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on February 24, 2011, 07:10:01 AM

Boardmembers may be interested that Tom Ward is being interviewed by Cramer on Mad Money this evening. 
Title: Re: SD - SandRidge Energy
Post by: Bronco on February 24, 2011, 07:30:46 AM
alertmeipp - first, I didn't say own commodities forever - I said the "owners" of natural resources.

Funny how we are on a website dedicated to Mr. Buy and Hold Forever by the way.

I do believe there are some investments worth holding a lifetime.

Example - beach front property in desirable areas, property in NYC, gold coins perhaps, certain toll booth businesses...

But I guess the smarter people just sell at the top and buy at the bottom and repeat over and over.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 01, 2011, 06:52:22 AM
I too am having a hard time coming up with a valuation. This presentation helps quite a bit. I plan to spend the weekend reviewing hte investor day presentation, 10k, and various calls.

http://www.thomson-webcast.net/us/dispatching/?event_id=8a2e602756c515e5f612d7e932ff7df9&portal_id=3f05139afebc9802474e076f0d87add4

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODM1NjN8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

Page 89 gives me what I am looking for, A net asset value. At $36 a share with $100 oil. Not bad.
Title: Re: SD - SandRidge Energy
Post by: Munger_Disciple on March 01, 2011, 11:03:25 AM
Can anyone suggest a book or another resource for valuation of oil & gas companies? I have been valuing these based on estimated production, all in costs and some conservative guess on what future oil prices will be & then by doing a discounted cash flow analysis.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 02, 2011, 04:53:22 PM
http://finance.yahoo.com/news/SandRidge-Energy-Inc-prnews-1466316810.html?x=0&.v=1

SandRidge Energy, Inc. Announces Pricing of $900 Million Offering of Senior Notes


OKLAHOMA CITY, March 2, 2011 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE:SD - News) today announced the pricing of its private placement of $900 million of 7.50% Senior Notes due 2021.  The offering, which was sold at 100% of par to yield 7.50% to maturity, was increased from a previously announced offering size of $700 million.  The offering, which is subject to customary closing conditions, is expected to settle on March 15, 2011.  Net proceeds from this offering will be used to fund its pending tender offer for up to $650 million in aggregate principal amount of its 8.625% Senior Notes due 2015 (the “2015 Notes”), payment of the accrued, unpaid interest on such notes in connection with the tender offer and repay borrowings under the company’s senior credit facility.   

To the extent that any 2015 Notes are not tendered or in the event the tender offer is not consummated, any remaining net proceeds are expected to be used for general corporate purposes, including the repayment of outstanding borrowings under its senior credit facility.  The company may also redeem or purchase any of the 2015 Notes that are not tendered and purchased in its tender offer using remaining net proceeds from this offering (if any), cash on hand or borrowings under its senior credit facility.

The notes have not been registered under the Securities Act of 1933 or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.  The company plans to offer and issue the notes only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S. 

This press release is being issued pursuant to Rule 135c under the Securities Act of 1933, and is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 02, 2011, 04:55:45 PM
They will use to proceed to pay back 8.625 senior. The remaining will be for general cap-ex. I guess the 200millions in cap-ex increase will come from here.
Nice to push back the maturity while lower the rate.

I expect CHK will have similar action soon.


Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 02, 2011, 05:23:29 PM
Im quite happy with this news. The new CFO is earning his keep. Look at how far these are pushed out to. I would love to have no maturities until 2020.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 02, 2011, 07:17:16 PM
Wonder if Fairfax is in the offering.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 02, 2011, 08:26:50 PM
Wonder if Fairfax is in the offering.

It beats treasuries but 2026 or whatever is a long time.
Title: Re: SD - SandRidge Energy
Post by: bookie71 on March 03, 2011, 08:53:01 AM
Would they maybe have a gain on the early payoff of the old debt?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 03, 2011, 09:06:53 AM
Would they maybe have a gain on the early payoff of the old debt?

I doubt it looks like they are paying it off at par plus unpaid dividends plus a small bit extra. I dont see a gain. I do see them earning a decent spread with the 1% rate reduction and also pushing it out to 2021 or whatever which is a good 10 years.

I would love to see no maturities till 2020. That would be outstanding. With $1 billion in cash flow coming and hedges going out 3-4 years we would be pretty well insulated against declines in oil prices and could focus on drilling with all excess cash. Who knows these guys may also be able to find more cheap acreage.

We also have a lovely call option on nat gas. I think we should buy some old rigs for now to ramp up drilling and to increase the ability to drill in the Pinion.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 03, 2011, 04:34:24 PM
I agree with the Analyst here.

http://www.cnbc.com/id/15840232?video=1826379675&play=1

I plan to ride out my calls and eventually exercise them. I like the program they have set up. We will get hit with a pullback at some point, but I think this is a good vehicle for playing energy. There are alot of levers they can pull, I plan to sit back and watch at least till I get long term gain status on the calls in my taxable account.
Title: Re: SD - SandRidge Energy
Post by: brker_guy on March 03, 2011, 04:57:41 PM
The video is a dead link, Myth...
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 03, 2011, 06:05:06 PM
The video is a dead link, Myth...

CNBCs website sucks.

Try this one.

http://www.cnbc.com/id/15840232/?video=1826379675&play=1
Title: Re: SD - SandRidge Energy
Post by: txlaw on March 03, 2011, 07:06:01 PM
Man, you guys are doing well on this one.  Congrats.
Title: Re: SD - SandRidge Energy
Post by: brker_guy on March 03, 2011, 10:42:04 PM
TxLaw, not as well as Mr. Watsa, but happy to take any pennies as we can get from SD's rise. :-)  Only LVLT can rise like SD or ATSG, life would be nice.  :) ;D

Myth, thanks for re-posting the link.
Title: Re: SD - SandRidge Energy
Post by: vinod1 on March 05, 2011, 09:46:54 AM
I too am having a hard time coming up with a valuation. This presentation helps quite a bit. I plan to spend the weekend reviewing hte investor day presentation, 10k, and various calls.

http://www.thomson-webcast.net/us/dispatching/?event_id=8a2e602756c515e5f612d7e932ff7df9&portal_id=3f05139afebc9802474e076f0d87add4

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODM1NjN8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

Page 89 gives me what I am looking for, A net asset value. At $36 a share with $100 oil. Not bad.

Myth,

On page 89, it lists "Resources" as $14,998 million. Do you know what assets this is referring to? Is this 2P+3P?

Thanks

Vinod
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 05, 2011, 01:09:13 PM
I am still working through the investor day, I am pretty sure they detail out how they came up with the calculation. I will post back once I finish it. I would assume its 2P and 3P, or perhaps Nat Gas acre which doesnt have a P due to the pricing, but still has value.

---

From the presentation it looks like its playing with spacing and infill drilling. Sounds basically like 2P and 3P, except not probably or possible but, there just not booked. I think they know they have more oil in the Permian and Miss, but havent booked them as reserves. They also said that if you put reserves on the books, after 5 years you have to write them off. They put back 80% of their gas back on with $4 pricing.

Perhaps they are being very conservative, and adding what they can drill / sell, then they will add more next year as reserve replacement and more the following year. Thats my best guess from listening to the bulk of the investor day, and understanding how accounting can shape business decisions and reporting. I may put in a call to investor relations for a recon to the SEC PV10 or strip PV10.

Here are some links to go with my theory - This also explains why Ward (a member of his team) said if gas prices dont rebound in 5 years they would consider monetizing them. He said gas was at the end of the 5 year development plan. Also explains CHK selling gas and acre. After 5 years you kinda get no create accounting wise for your land and undrilled reserves. I would add slowly.

I predict a JV is announced sooner rather than later. They have a clock running against them between lease expiries and have an incentive to get it done in a $100 oil environment.

http://www.velaw.com/uploadedFiles/VEsite/Resources/NewSecOilGasReserveRulesRaisingIssue.pdf
http://blogs.oilandgasinvestor.com/blog/2009/01/27/2010-sec-reserve-reporting-rules-may-affect-ma-deal-making-as-soon-as-now/

“The SEC says five years is a reasonable plan of development. Anything past five years, there should be some circumstance that makes sense for (booking) that.”
For example, an operator may have a several-year history of drilling 20 wells per year in a play with predictable results, and all indications are that this program will continue beyond five years. The operator may have a good claim to book more of the reserves as proved than only what may be drilled in the next five years.

-------

Can anyone suggest a book or another resource for valuation of oil & gas companies? I have been valuing these based on estimated production, all in costs and some conservative guess on what future oil prices will be & then by doing a discounted cash flow analysis.

I think what you are doing is what everyone seems to do. Its what I do. I look at Finding and Development costs, reserves, and production. I think $100 oil over the decade is conservative, and prefer to see PV10 based on $85 oil. I tend to discount this and if everything looks good I buy. SD of course is a special case, it sucks on all of these metrics except for reserves and strip PV10.

I dont think a book would be useful given the SEC changes. I focus on the analyst reports and questions to see what they are looking at. After following 5-10 companies you tend to get a feel. Canadian Value also has a good process.

-------

Finally I really like the new CFO. The old one was good, and had a much crappier situation to work with. This new one seems very profession and is taking care of the blocking and tackling. Pushing out maturities, addressing funding gaps for 2011, 2012. Addressing maturities up till 2020. Lowering rates, expanding the credit facility.

Ward is also quite impressive. He has been burned and his shares are underwater. All indications show that they plan to hedge the hell out of that oil out 4-5 years. I think I heard they will go over 100%.
Title: Re: SD - SandRidge Energy
Post by: vinod1 on March 06, 2011, 02:09:43 PM
Thanks Myth!
Title: Re: SD - SandRidge Energy
Post by: vinod1 on March 06, 2011, 02:13:01 PM
Can anyone suggest a book or another resource for valuation of oil & gas companies? I have been valuing these based on estimated production, all in costs and some conservative guess on what future oil prices will be & then by doing a discounted cash flow analysis.

Security Analysis on Wall Street by Jeffery Hooke has a section on O&G valuation. This book has a section on valuing some of the special cases like P&C, Banks, O&G. It is pretty good book, less on theory and more on actual practical application

Vinod
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 24, 2011, 08:50:19 AM
Anyone taken the time to compare the two filings. I know its up due to the updated filing, but I havent compared the two to see the big changes.

We have the trust 1.
A JV agreement at some point.
Perhaps a trust 2.
Additional Hedges.
And finally general operating results all as potential catalysts.

I forgot who mentioned it, but with hedges SD has turned into a Manufacturing company.
Title: Re: SD - SandRidge Energy
Post by: valuecfa on March 24, 2011, 09:23:47 AM
Congrats on the Sandridge leaps Myth! I've closed 1/3rd of my leap position over the past few days. I don't have any idea how much higher oil will go, but it is getting a little frothy (along with most other commodities) in my opinion.
Title: Re: SD - SandRidge Energy
Post by: Munger_Disciple on March 24, 2011, 09:59:02 AM
 
Quote
Security Analysis on Wall Street by Jeffery Hooke has a section on O&G valuation.

Thanks Vinod1
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 24, 2011, 12:26:45 PM
Congrats on the Sandridge leaps Myth! I've closed 1/3rd of my leap position over the past few days. I don't have any idea how much higher oil will go, but it is getting a little frothy (along with most other commodities) in my opinion.

Thanks Valuecfa. How often do you use leaps?

I am holding SD and ATPG. Will take some off of ATPG and will likely sell the offshore drillers to reduce oil exposure overall. I dont know whats going on. Either the economy goes or oil falls, but you have real issues in the middle east.

Its tough. I love the prospects with SD and the hedges, they have no real commodity risk, but will tank like everything else will. My value brain says hold to see what the JV and Trust do. The other piece of me says lock in your gain you idiot.

With the JV and Trust you can assign a private market value to all of the acreage.

Title: Re: SD - SandRidge Energy
Post by: valuecfa on March 24, 2011, 12:53:52 PM
Congrats on the Sandridge leaps Myth! I've closed 1/3rd of my leap position over the past few days. I don't have any idea how much higher oil will go, but it is getting a little frothy (along with most other commodities) in my opinion.

Thanks Valuecfa. How often do you use leaps?

I am holding SD and ATPG. Will take some off of ATPG and will likely sell the offshore drillers to reduce oil exposure overall. I dont know whats going on. Either the economy goes or oil falls, but you have real issues in the middle east.

Its tough. I love the prospects with SD and the hedges, they have no real commodity risk, but will tank like everything else will. My value brain says hold to see what the JV and Trust do. The other piece of me says lock in your gain you idiot.

With the JV and Trust you can assign a private market value to all of the acreage.



I recall an SD leap discussion with you back when we (or maybe just i) were about underwater, nice to have this reversal of late.

I seem to nearly always have 1 to 3 leap positions on, usually with large, historically low volatility names that are trading at a meaningful discount, with a possible catalyst that may, or may not, develop. -example: SD partnering or asset sales, oil & NG price, JNJ arbitration victory, MSFT change in capital structure policy.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 24, 2011, 01:19:00 PM
Humm interesting, I do remember that. I sold 7.50s for a loss and doubled down on the 5s. It worked out quite well. I switched the roth to 2013s (should have gone the other way) and that too has worked out well. I should probably sell out my basis considering how far its up.

I like Deep in the money leaps, and you are right. I tend to focus on a catalyst. I will have to look into MSFT, never could find the catalyst for that one, but you have identified one.
Title: Re: SD - SandRidge Energy
Post by: Shane on March 25, 2011, 03:11:09 PM
Out of curiosity, what appraised value are you all finding for SD?  I bought a small position in hopes of learning about the industry by having skin in the game, but have been way to busy to break down their articles... in fact am supposed to be studying for a mid-term right now.  I thought about getting out now that I doubled my money, but recently heard from a friend in the industry that they just now bought!  I was surprised to hear he was so late and still optimistic, but he has been very successful for a number of years.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 30, 2011, 06:58:01 PM
Interesting read. I hope it corrects now vs. crashing later. I would like to hold my shares, but if things get too far out of wack I may be forced to sell. Any thoughts.

http://www.gurufocus.com/news.php?id=127583
Title: Re: SD - SandRidge Energy
Post by: ericd1 on March 30, 2011, 08:02:33 PM
Interesting article...

Let's see Libyan production cut (2% of world) other MENA countries not really increasing supply, Japan demand cut (how much really?) and now the U.S. is floating in crude oil (no where else to go???), but U.S. gasoline demand is down...down 0.1% yoy because of higher prices.

Myth - I'm really surprised you don't know how to play this one...LOL 

I doubt oil is going much below $90 this year and producers profits will be up...If this shows up anywhere I'd expect it at the pump. How about shorting UGA (US gasoline)?

And I thought we were at or near peak oil - WTF - Turn off the faucet...
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 30, 2011, 08:26:22 PM
Well I have been a bit torn for the last two weeks. Oil is about 50% of my portfolio mainly because SD is up significantly. I love SD and its pospects but I think oil is a bit ahead of itself (I dont buy this recovery, I feel like things are getting better but its not back to the races), articles like this kinda make me think. So far I have just slept on it and its paid off quite nicely over the last 2 weeks. I will probably continue to sleep on it (just too many near term catalyst). ;D.

SD will be fine long term, but will correct like everyone else should oil move towards $95 or so. Its weird $80 is the new $40 and those are low prices.

I dont do 2 things. I dont short, and I dont cut my winners unless I find something better. I may have to break one of those rules sooner or later (probably wont be the shorting one). Im a peak oil guy (well actually a peak cheap oil guy), but things get ahead and then correct.
Title: Re: SD - SandRidge Energy
Post by: ericd1 on March 31, 2011, 07:05:05 AM
This is crazy - on the news this morning they said US national gasoline prices moved up again...I'm wondering if this is all a conspiracy... :)
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 01, 2011, 06:40:04 AM
We have liftoff and they have started the IPO.

Where do you some of you smarter guys place IV at?

http://galaxystocks.com/7515/business-news/sandridge-energy-inc-initiates-initial-public-offering-nysesd/

We still have 3-4 other catalysts within the next 5-6 months.

---

Eric mid east is real, but we have alot of storage pure that last article. Not sure what to make of all this. I think its pricing in further mideast issues in the summer, not so much supply and demand.
Title: Re: SD - SandRidge Energy
Post by: Bronco on April 01, 2011, 07:23:48 AM
Myth, you are the man, myth and legend on this one. 

$5 calls way back when were the way to go.

All I ask is that you consider me for employment when you start your investment company.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on April 01, 2011, 08:56:09 AM
Myth - I have never met you but I can say in a very straight way I like you a lot! :)  I have done very very well off this small position buying it in the low 5's.  My only regret is not buying more!!! 

S
Title: Re: SD - SandRidge Energy
Post by: JAllen on April 01, 2011, 10:16:01 AM
Just for yall's information:  19 of the 26 increase in U.S oil rigs this past week were in Oklahoma.  From a 156 base!  Not sure what it means but it's probably a good sign!


           Rotary Rig Count            
      04/01/11            
            Week      Year
Location      Week   +/-   Ago   +/-   Ago
                  
Land      1729    39    1690    330    1399
Inland Waters      20    0    20    5    15
Offshore      27    -1    28    -24    51
United States Total      1776    38    1738    311    1465
                  
Gulf Of Mexico      27    -1    28    -23    50
                  
Canada      285    -144    429    134    151
                  
North America      2061    -106    2167    445    1616
                  
Breakout Information      This Week   +/-   Last Week   +/-   Year Ago
                  
Oil      877    26    851    375    502
Gas      891    11    880    -58    949
Miscellaneous      8    1    7    -6    14
                  
Directional      228    4    224    6    222
Horizontal      1017    22    995    282    735
Vertical      531    12    519    23    508
                  
Major State Variances      This Week   +/-   Last Week   +/-   Year Ago
Alaska      6    0    6    -3    9
                  
Arkansas      36    2    34    -5    41
                  
California      41    -1    42    12    29
                  
Colorado      72    1    71    20    52
                  
Louisiana      175    -1    176    -43    218
                  
New Mexico      78    1    77    32    46
                  
North Dakota      159    4    155    65    94
                  
Oklahoma      175    19    156    56    119
                  
Pennsylvania      104    0    104    28    76
                  
Texas      770    4    766    147    623
                  
W Virginia      16    0    16    -6    22
                  
Wyoming      40    2    38    3    37
Title: Re: SD - SandRidge Energy
Post by: claphands22 on April 01, 2011, 11:20:16 AM

I seem to nearly always have 1 to 3 leap positions on, usually with large, historically low volatility names that are trading at a meaningful discount, with a possible catalyst that may, or may not, develop. -example: SD partnering or asset sales, oil & NG price, JNJ arbitration victory, MSFT change in capital structure policy.


JNJ long term call options seem interesting. You can currently buy Jan2013 call options with a 70 strike for 1.15.  The call option seems irrationally cheap. I think I read before you were buying the prime broker options with a 5 year time frame, if you are, could you share the price on those? Just wondering.
Title: Re: SD - SandRidge Energy
Post by: valuecfa on April 01, 2011, 01:11:12 PM

I seem to nearly always have 1 to 3 leap positions on, usually with large, historically low volatility names that are trading at a meaningful discount, with a possible catalyst that may, or may not, develop. -example: SD partnering or asset sales, oil & NG price, JNJ arbitration victory, MSFT change in capital structure policy.


JNJ long term call options seem interesting. You can currently buy Jan2013 call options with a 70 strike for 1.15.  The call option seems irrationally cheap. I think I read before you were buying the prime broker options with a 5 year time frame, if you are, could you share the price on those? Just wondering.

I'd feel much better owning the $60 leaps on JNJ, but that is me. I don't own any options on any prime brokers. I used to have BAC warrants, but i decided to sell them and purchase the stock instead.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 02, 2011, 06:05:27 PM
Myth - I have never met you but I can say in a very straight way I like you a lot! :)  I have done very very well off this small position buying it in the low 5's.  My only regret is not buying more!!! 

S

Lol, I had to read that a few times, it sounded a bit off at first.  :).

In the interest of being prudent I have decided to trim my oil and gas holdings a bit and will sell 10% of my SD position. I would sell down ATPG as well, but my leaps are off quite a bit with the drop from $20 to mid $17s. I dont know whats going on with this market, but I feel like we are on borrowed time. Oil could rally to $150 in the summer on mid east issues, or pull back to $90 due to storage issues and either would make sense. Interesting times.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 12, 2011, 08:19:42 AM
Talk about a pullback. I wish I sold 20%. Damn.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on April 12, 2011, 08:34:43 AM
Myth - Why trade in and out of this name when the fundamentals look very strong?

Talk about a pullback. I wish I sold 20%. Damn.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 12, 2011, 09:03:54 AM
For me oil and gas has come to dominate my portfolio, which makes days like this quite painful. While I like the stocks, I like to trim and prune when things get frothy. I sold some SD and 1/3rd of my ESV, this doesnt appear to have been enough, but I guess it never is when things go south.  

Its interesting though -Oil going from $110 to $100 or $95 is a none issue for most of these stocks. They move up 15% when oil goes up 25%, then pull back 20% when it goes back 10%. I plan to hold for now. I have missed the big chance to lock and gains, and it doesnt make sense to sell now for me. Ward has many levers, and has proven the trust structure can work. I am hoping for a Billion dollar trust, but they need enough producing wells to sell into it.

Ward had an interview today and will have a presentation in New York which should be interesting.

----

From listening to the presentation. They still plan on having around 1 million acres.

Plan to double the rigs in the Miss which would be quite nice.
Trust units have to be done in small tracts of land which is interesting.

Also they are getting better results with the wells which should push up the rates of return.

----

Bronco Drilling has been roped by CHK. I like it, hopefully SD can buy a few rigs from them or can buy a drilling unit from someone. I hope they buy LUKs drilling business.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 05, 2011, 04:08:10 PM
down to 10.30 after result. The # is actually not bad. :'(
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 13, 2011, 12:03:19 PM
Notice the 10$ leap is down to 3 bucks. Seems like a more bargain than the shares.
Title: Re: SD - SandRidge Energy
Post by: gfp on May 16, 2011, 04:05:08 PM
A little bit of buying ($50k) by this director last week, just filed:

http://www.sec.gov/Archives/edgar/data/1349436/000134943611000141/xslF345X03/edgardoc.xml
Title: Re: SD - SandRidge Energy
Post by: Sea Island on May 17, 2011, 03:35:30 AM
In the SD proxy statement there was this footnote: Mr. Ward has pledged 18,644,918 of these shares as security
for personal loans
. This is on page 47. Last year, I called Kevin White SD shareholder relations to ask him why TW was selling #6,000,000 shares at $5.86, I was buying at the time so I was curios to know. I was told that this share sale was to meet charitable commitment made by TW. Apparently he operates a school for wayward youth in Oklahoma. Perhaps someone with more coroporate governance experience, or a bookie, could explain why almost all of TW's shares are pledged for personal loans.
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 17, 2011, 06:48:15 AM
I looked into this about a year ago. I learned that he and many nat gas/oil guys leverage holdings like crazy similar to Aubrey M at Chesapeake. They leverage up, buy at $50/share and collapse the stock through forced stock sales due to margin calls when the stock goes below $10. 
Title: Re: SD - SandRidge Energy
Post by: gfp on May 17, 2011, 07:05:05 AM
At least Ward (or his creditors) was wise enough to hedge his CHK shares in 2006 to prevent a McClendon situation with margin calls.  Aubrey came off looking like a real idiot in that situation and that whole 'lets buy his map collection' bit was very damaging to CHK's credibility.

Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 17, 2011, 08:14:58 PM
I remember trying to see what Ward still had for CHK shares after leaving and couldn't get anywhere as he was no longer an insider. How did you find out he hedged his CHK shares and how do you know he has CHK shares? Just curious... maybe i missed an article/SEC filing.
Title: Re: SD - SandRidge Energy
Post by: gfp on May 17, 2011, 09:04:59 PM
He entered into a bunch of forward sale agreements with collar like features back when he was still an insider.  It's in the notes to his CHK form 4s that are still buried in his SEC stuff.

Start here and press 'next 80' a ton of times and you'll get to the last CHK filings (if you are still curious).

http://www.sec.gov/cgi-bin/own-disp?action=getowner&CIK=0001038276

I don't know that he still owns any CHK - he may have sold out completely to get into SD and pay off loans.  I don't care too much so I haven't tried to count the shares.  I just remember it from when it came out because CHK always had a ton of insider buying (which in case you haven't noticed, I pay attention to).
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 25, 2011, 02:39:26 PM
Interesting move.

http://finance.yahoo.com/news/SandRidge-Energy-Files-prnews-1171139108.html?x=0&.v=1
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 25, 2011, 03:08:59 PM
This is great news. Sell em while you can......
Amazing when you think about it. We get the money up front, drill the wells. Then pay them back overtime. Huge rate of return. They only want a 6% - 10% yield and a call option on oil prices...

My guess is $1 billion would take too long to put together, and they are worried about supply and demand.

Damn just noted it was in the Permian. Very interesting indeed. They have the wells there to do this for a while inmo.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 25, 2011, 03:20:10 PM
Yes, that was the interesting part. Pretty smart way to finance. As long as it's well hedged and service cost is somewhat controlled, that's the best way to go to re-build this company.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 25, 2011, 08:16:41 PM
Ya this is so obvious I am kicking myself for missing it. I think Ward will go it alone and just keep doing this as long as the demand is out there. He probably didnt have enough wells in the Miss. This is interesting, he can do this for quite a while and can even keep buying miss acreage. The trust allow him to sell the acreage for an ungodly amount and if he is getting it for under $2k its a nice return......

Honestly I cant wait till this process is done. Imagine Ward and his team free from funding and capital -- Looking for new oil. Thats a nice call option.
Title: Re: SD - SandRidge Energy
Post by: Sea Island on May 26, 2011, 06:51:16 AM
Up next: CHK trusts the entire ball of wax and gets to Aurbey's $75 share valuation.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 26, 2011, 05:36:17 PM
Wow. Over 12, my 11 sold looks stupid NOW - but well, I promise myself to de-leverage. Really amazing how SD was able to "trust" its way through.
True CHK can copy - but remember most of their production is still NG which doesn't give 100%+ ROI.
Title: Re: SD - SandRidge Energy
Post by: Sea Island on May 27, 2011, 04:06:11 AM
I have heard from someone more informed than me, that the tust structure being utilized by SD is essentially the same to the VPP format used by CHK but obviously for retail investors, so that would indicate that CHK could do what SD has done with gassy acerage?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 27, 2011, 09:21:59 AM
I dont know either way. To me they seem different but I havent followed CHK.

Retail investors are demanding so little return, I just cant see Oil and Gas companies drilling wells for so little, though the land values looks to be about the same.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 27, 2011, 11:25:54 AM
They bot 90k for 800millions couple years ago. Now, IPO 60% of 16k (net 100k) for 6-700millions... that's good business.

I know there is cost associated with it... I am very tempted to add back.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 27, 2011, 01:27:34 PM
They bot 90k for 800millions couple years ago. Now, IPO 60% of 16k (net 100k) for 6-700millions... that's good business.

I know there is cost associated with it... I am very tempted to add back.

I am going to hold. When we take out the new highs or if. I plan on selling a chunk and then will add on a pullback with the excess proceeds and a bit more. I am kicking myself for not taking gains at $13, adding at $10, and preparing to sell the new leaps. This will be done in my Roth. I think I will exercise my $5 2012s in my taxable account.

I will do this on the next go round. I cant add, similar to ATSG - SD is dominating my portfolio. Oil and Gas is my portfolio which makes it even tougher. I have sold off Petrobank, and Diamond and will sell Ensco soon. Now its just SD and TAT.

I think SD will continue to trade with oil prices though inmo so we have plenty of chances. This just got a whole lot more interesting. I notice Ward did this right after his last conference, we wont hear from him till July Q2 call or August. Interesting. He can do this for quite a while. He could do it again, close the funding gap, buy a bunch of cheap rigs and do another one in the Permian or Miss for more cash.

I think demand is there as long as rates are low and oil prices are high. We get paid up front and get a kicker on the upside. He could delever through this lol. Very interesting indeed.....
If we pullback to $10 I may sell something and buy.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 27, 2011, 05:37:46 PM
Hope it won't go back to 10, I have enough. ;D
Oil stocks actually not dropping much in the 2nd part of the oil drops. We know oil companies don't need 100+ oil to be very profitable.
Title: Re: SD - SandRidge Energy
Post by: Swizzled on June 02, 2011, 09:56:03 AM

I made a few notes from the recent conference call.  I still can't get over how different this company is from the Sandridge of 2009.

http://seekingalpha.com/article/272825-sandridge-energy-finding-salvation-through-oil-production
Title: Re: SD - SandRidge Energy
Post by: Myth465 on June 02, 2011, 10:30:49 AM

I made a few notes from the recent conference call.  I still can't get over how different this company is from the Sandridge of 2009.

http://seekingalpha.com/article/272825-sandridge-energy-finding-salvation-through-oil-production


Thanks Swizzled, always enjoy your reports. You were right about one thing, tough to value. I am looking for 50% of NAV calculated by Ward and his team. Though the market is putting insane prices on smaller tracks via the trusts. The calculated land values are .......
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on July 20, 2011, 06:21:47 PM
looks like FFH is selling out SD.
http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDEyMDkxOTEtMTEtMDQwMzQ1L3htbA%3d%3d#F1
Title: Re: SD - SandRidge Energy
Post by: gordoffh on July 21, 2011, 03:08:12 AM
after seeing this news i had to revisit the story - it is my largest holding - everything looks to be coming together - Permian trust,drilling,oil prices,selling of Petrohawk at a very nice premium - of course world events,failure of trust and missed guidance on production for quarter would hurt especially the last  - i will hold - maybe they have other need for the cash - they still own a lot of convertibles for now anyway - i believe mr. wasta owned some SD in his own accounts - is he still holding
Title: Re: SD - SandRidge Energy
Post by: Myth465 on July 21, 2011, 07:38:18 AM
Still my largest holding. I want to lighten up a bit around $13. I love these trusts and would love to see another Permian trust right after, followed by a Miss trust. The economics are amazing in my opinion. Hopefully we are hedging every drop of oil in production at $100 out 2 years....
Title: Re: SD - SandRidge Energy
Post by: Liberty on July 22, 2011, 07:52:00 AM
http://www.gurufocus.com/news/139373/prem-watsa-reduces-holdings-in-sandridge-energy
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on August 05, 2011, 06:48:15 AM
http://finance.yahoo.com/news/SandRidge-Energy-Inc-Reports-prnews-3675657076.html?x=0&.v=1

Signs $500 Million Mississippian Joint Venture
Launches New Mississippian Play, Targeting One Million Acres
Announces Three-Year Strategic Plan
     - Self-Funding Capital Program
     - Double-Digit Annual Production Growth
     - Debt to EBITDA Ratio of Less Than 2:1
Increases 2011 Production Guidance to 24.1 MMBoe, 20% Growth from 2010

I am shocked by the steep sell-off as the numbers were actually pretty good once you subtract the one time items...

Thanks,

S
Title: Re: SD - SandRidge Energy
Post by: rijk on August 05, 2011, 06:58:04 AM
- debt
- oil prices down
- fairfax selling > 20 million shares

the first 2 can be debated but the third one can't.......

regards
rijk
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on August 05, 2011, 07:01:37 AM
CC must have gone badly.  Off over 20% today.  Sheesh.
Title: Re: SD - SandRidge Energy
Post by: S2S on August 05, 2011, 07:12:51 AM
- debt
- oil prices down
- fairfax selling > 20 million shares

the first 2 can be debated but the third one can't.......

regards
rijk

... much of which should have been reflected in yesterday's closing price.

CC must have gone badly.  Off over 20% today.  Sheesh.

I wasn't listening in, but I doubt it; Ward's team has always been very polished in their interaction with analysts and investors.

My initial read is that the market seems worried about higher '11 and '12 capex - the current market volatility introduces the risk that not all of the (now larger) funding gap can be filled with new JVs/trusts.
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on August 05, 2011, 07:25:15 AM
Thanks S2S...  in other words Tom Ward has come down with a case of Chesapeakitis.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 05, 2011, 07:46:48 AM
My theory is different. I think people are selling their winners......
Title: Re: SD - SandRidge Energy
Post by: S2S on August 05, 2011, 07:55:40 AM
My theory is different. I think people are selling their winners......

That might be why Prem sold... at today's price, there just isn't much "winning" to be had for most people.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 05, 2011, 08:02:37 AM
To be honest I am glad Tom Ward is buying land  ;D. Today sucks my networth has taken a significant hit now that SD and ATSG have collapsed. I am probably going to sell ATPG for a loss (tax reasons), buy tons of SD 2013s, and sell my 2012s at a gain.

Ward flipped land bought last year for 20x the purchase price, he can do what he wants to inmo when it comes to buying land.....
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on August 05, 2011, 08:04:20 AM
Myth - I like your interpretation better.

How about Hete's pronouncement at the end of the ATSG call...  nice to hear from a CEO.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 05, 2011, 08:12:38 AM
Myth - I like your interpretation better.

How about Hete's pronouncement at the end of the ATSG call...  nice to hear from a CEO.

Do you mind posting what he said. I am playing catchup today. Everything I own is being hammered. I liked the ATSG close but havent listened to the call.
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on August 05, 2011, 08:37:36 AM
I'm paraphrasing but basically he said that at our current stock price, buyers will be generously rewarded.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 05, 2011, 08:45:10 AM
I'm paraphrasing but basically he said that at our current stock price, buyers will be generously rewarded.

I am a big Hete fan. Bought a bit at 5.20. I still think its worth $16.....
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on August 05, 2011, 09:00:54 AM
I just doubled my position in SD @ $7.029 by selling half my position in ATPG.

Thanks,

S

EDIT: I just put an edit that I sold my other half position in ATPG but the trade did not execute and I just cancelled it right now! YAY cause of the rebound...
Title: Re: SD - SandRidge Energy
Post by: gordoffh on August 05, 2011, 01:19:04 PM
after seeing this news i had to revisit the story - it is my largest holding - everything looks to be coming together - Permian trust,drilling,oil prices,selling of Petrohawk at a very nice premium - of course world events,failure of trust and missed guidance on production for quarter would hurt especially the last  - i will hold - maybe they have other need for the cash - they still own a lot of convertibles for now anyway - i believe mr. wasta owned some SD in his own accounts - is he still holding

i guess i should have revisited a little harder  -  talk about a timely sell
Title: Re: SD - SandRidge Energy
Post by: DCG on August 08, 2011, 11:40:05 AM
huh..down to around $6.50.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 12, 2011, 11:59:25 AM
Great article.

http://seekingalpha.com/article/287091-a-second-opportunity-to-invest-in-sandridge-energy-at-a-bargain-price
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on August 12, 2011, 12:46:29 PM
Myth - Great article... I am really happy I got the opportunity to double my position in SD as I am very happy with the oil plays in the pipeline!    :) 

Great article.

http://seekingalpha.com/article/287091-a-second-opportunity-to-invest-in-sandridge-energy-at-a-bargain-price
Title: Re: SD - SandRidge Energy
Post by: bargainman on August 12, 2011, 04:10:13 PM
Swizzled, I'm not sure if you're reading this, but why don't you have a position in SD?  Why CHK instead of SD?  Or are you planning to pick some up after the recent fall?  Or has your experience with ATPG made you want to stay away from highly leveraged asset gathering managements?

Thanks!
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on August 16, 2011, 08:07:01 PM
http://www.vcall.com/customevent/conferences/enercom/20110814/webcast.html

Tom Ward presented today at Enercom - 4:20 pm
Title: Re: SD - SandRidge Energy
Post by: bluedevil on August 21, 2011, 06:11:18 PM
Wonder what effect today's rapid events in Libya will have on the price of oil.  That's 1.5 million barrels a day that will flow back to the international markets.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 21, 2011, 06:25:56 PM
I would guess its a negative effect. Should be interesting over the next few months. WTI has pulled back quite a bit, I wonder what will drop brent.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 21, 2011, 06:42:25 PM
My guess is the effect of it will be very small. Those who follow the news know this is coming.
The key (at least what the media is trying to paint) is economy.

No one care about demand and supply any more.
Title: Re: SD - SandRidge Energy
Post by: S2S on August 21, 2011, 06:49:37 PM
You don't have to guess, Brent Crude is trading at $106.90/bbl as of this posting, down 1.57%

The Brent-WTI spread, meanwhile, still sits at a mind-boggling $24  >:(

https://www.theice.com/homepage.jhtml (https://www.theice.com/homepage.jhtml)
Title: Re: SD - SandRidge Energy
Post by: Swizzled on August 21, 2011, 07:36:43 PM
"Swizzled, I'm not sure if you're reading this, but why don't you have a position in SD?  Why CHK instead of SD?  Or are you planning to pick some up after the recent fall?  Or has your experience with ATPG made you want to stay away from highly leveraged asset gathering managements?"

Sorry I'm slow to respond.  Couldn't get logged in for a couple of days for some reason, likely my own lack of brain power.

I don't have a good answer for you on why no SD.  I looked at it last summer and bought some in the low $4s and then sold when it bounced over $5.  Missed the entire ride to $13.  When I bought I had no knowledge of the Miss play, and at the time I just wasn't sure I understood what all of their assets were worth.  I should have likely worked a little harder.

I've looked again recently and wrote these:

http://seekingalpha.com/article/287091-a-second-opportunity-to-invest-in-sandridge-energy-at-a-bargain-price

http://seekingalpha.com/article/285200-is-it-rational-for-sandridge-energy-s-market-capitalization-to-drop-42-in-one-week

I'd quite happily buy at these prices, but I'm fully invested now.  Too bloody early again !!!
Title: Re: SD - SandRidge Energy
Post by: tyska on August 21, 2011, 07:40:03 PM
You don't have to guess, Brent Crude is trading at $106.90/bbl as of this posting, down 1.57%

The Brent-WTI spread, meanwhile, still sits at a mind-boggling $24  >:(

https://www.theice.com/homepage.jhtml (https://www.theice.com/homepage.jhtml)

 Sure need another outlet for our Canuck oil. :)

Wonder what effect today's rapid events in Libya will have on the price of oil.  That's 1.5 million barrels a day that will flow back to the international markets.

 Is there any idea how much damage has been done to the infrastructure. And are the rebels going to be cohesive enough to provide stability for the oil companies to move back in. I'd think Gaddafi falling is but a small part to the picture right know.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 22, 2011, 07:29:54 PM
Some insider buy. I was buying at 11 just weeks ago.. now at 6.  :-\
they hedged close to 35% of their 11, 12 and 13 production. both SDT and PER still trade relatively well so there is demand for trusts.
If they are willing to give up 30% of their old Miss play, the funding gap will be closed for 2012. Hope they execute.
A big position for me now.

Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 22, 2011, 09:36:34 PM
Im all in on 2013s. I think it works out barring a double dip or world wide recession killing oil prices. SD is hedged and Capex will be closed via trusts and JVs. With the fed keeping rates at 0 till 2013 we should have plenty of demand for trust yielding 7% unless oil drops below $70. We also have a significant amount of oil hedged for 2011 and 2012. The stock though is a slave to the market, and will continue to sell off with Oil, Europe, and other issues.

Probably best not to watch over the next few months if you are all in. Also I think it will get taken out if it hangs around $6 for a while. You could offer $12 and not too many shareholders would say no at this point. The value is in the assets in my opinion...
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 22, 2011, 09:43:32 PM
Im all in on 2013s. I think it works out barring a double dip or world wide recession killing oil prices. SD is hedged and Capex will be closed via trusts and JVs. With the fed keeping rates at 0 till 2013 we should have plenty of demand for trust yielding 7% unless oil drops below $70. We also have a significant amount of oil hedged for 2011 and 2012. The stock though is a slave to the market, and will continue to sell off with Oil, Europe, and other issues.

Probably best not to watch over the next few months if you are all in. Also I think it will get taken out if it hangs around $6 for a while. You could offer $12 and not too many shareholders would say no at this point. The value is in the assets in my opinion...

We are on the same page. What's ur cash level?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 22, 2011, 09:55:17 PM
Im tapped out. Maybe 5% or so....

Without much cash, no point in watching, I wont sell / exercise until $12 or late 2012 early 2013. This too shall pass  :), or not. Either way life goes on. I feel much better about SD then ATPG. I think Ward knows what he is doing and like the 1 million acres. The guys at ATPG, thats more of a gamble / pray type situation....
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 23, 2011, 05:58:06 AM
Market is saying they will issue equity. Ward said it's unattractive to do so.
Another 500millions trust would go a long way.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 23, 2011, 09:18:58 AM
Market is saying they will issue equity. Ward said it's unattractive to do so.
Another 500millions trust would go a long way.

To be honest. The market may be right. Ward has done it before with the converts. I hope if he issues equity we get way more then we give up (such as with Miss 1). I dont see why he would need to now though, selling none core gas and more trusts makes more sense. The company should be Pinion, Miss, and Permian, and perhaps should sell the Pinion.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on August 23, 2011, 02:28:10 PM
Market is saying they will issue equity. Ward said it's unattractive to do so.
Another 500millions trust would go a long way.

To be honest. The market may be right. Ward has done it before with the converts. I hope if he issues equity we get way more then we give up (such as with Miss 1). I dont see why he would need to now though, selling none core gas and more trusts makes more sense. The company should be Pinion, Miss, and Permian, and perhaps should sell the Pinion.

Myth - no, don't sell the Pinion. Hold on a few more years and it will be worth a lot more - if you believe CHK.  I would rather see another trust than anything else, Ward did better with the trusts. I was rather disappointed in the JV pricing and in this low interest environment the trusts will continue to be successful. Just MHO.....

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 23, 2011, 03:17:03 PM
You are probably right Zorro though I dont see a nat gas rebound anytime soon. The JV valuation was a bit low but I believe Ward was A. Trying to maintain control and operator status, and B was trying to offset expanding capex with the JV. The JV was really out of no where, I just assumed he would keep issuing trusts at 7% yield to unit buyers.

I think Ward and Audrey are creating tremendous value, and was looking to switch into CHK at some point due to them continuing to buy land. I was quite happy when Ward announced another million acres at a similar price. Once things recover a bit I hope to rebuy into CHK. The NAV to SP is getting ridiculous there with all the new places / JVs. 
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 23, 2011, 04:34:41 PM
Market is saying they will issue equity. Ward said it's unattractive to do so.
Another 500millions trust would go a long way.

To be honest. The market may be right. Ward has done it before with the converts. I hope if he issues equity we get way more then we give up (such as with Miss 1). I dont see why he would need to now though, selling none core gas and more trusts makes more sense. The company should be Pinion, Miss, and Permian, and perhaps should sell the Pinion.

Myth - no, don't sell the Pinion. Hold on a few more years and it will be worth a lot more - if you believe CHK.  I would rather see another trust than anything else, Ward did better with the trusts. I was rather disappointed in the JV pricing and in this low interest environment the trusts will continue to be successful. Just MHO.....

cheers
Zorro

500 millions for ~10% is not low. Remember those are raw land.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 07, 2011, 08:45:33 AM
New presentation and a few new slides.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDE4NjA2NnxDaGlsZElEPTQzODk0NXxUeXBlPTI=&t=1

I like slide 22, Also up to 400,000 acres in #2.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on September 07, 2011, 09:27:55 AM
New presentation and a few new slides.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDE4NjA2NnxDaGlsZElEPTQzODk0NXxUeXBlPTI=&t=1

I like slide 22, Also up to 400,000 acres in #2.

Thanks.

SD has definitely looked like a fat pitch to me for the last few weeks with the stock dropping so much. I tripled my money in SD over the last year and even though I think it is now a better company than when I first bought in, with the recent pullback, Mr Market was offering me the stock for almost the same price I originally paid for the shares. I think Tom Ward is definitely in his element when it comes to unlocking value out of plays like those SD has.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 07, 2011, 10:57:07 AM
I agree. I also like the way he thinks and puts things. The plans leave out about $1 million acres and he hopes to self fund it. I dont think he will have a hard time signing up a JV partner, and will likely do a few a trusts once they ramp up drilling. I am hoping for a repeat of last year, except this time I will take a bit more profits along the way lol.

The only big fear for me is the economy. Unlike ATPG, SD is pretty solid operationally. Low oil prices though could sink the idea. All indicators though point to tightening oil markets though, but we all know those indicators go right out the door when the economy slows or declines....
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on September 07, 2011, 12:46:00 PM
Well, regarding a drop in the economy and oil prices, I like to think (or fool myself) that given that Ward has learned his lesson with natural gas, the hedges he put in place for SD's oil production should be good enough to guarantee us good results.

But then again I say fool myself because when oil prices drop usually that is all Mr. Market looks at, and doesn't bother looking at who has hedges in place or not and SD would get killed like everybody else.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 07, 2011, 01:00:44 PM
Yes I agree. I am slowly learning that Intrinsic value and Quoted value often have very little to do with each other. Ward  is putting together a solid company, and a solid business plan. I agree with him regarding trust demand as well. Only time will tell, but I am very comfortable holding.
Title: Re: SD - SandRidge Energy
Post by: rijk on September 08, 2011, 06:07:50 AM
hmmmmm....  which company could this be???

could fairfax be buying back the shares they sold at $11 at a 40% discount?

regards
rijk

Where do you see speculation in the markets today?
Clearly in the commodity markets. The price of gold and
oil and whatever commodity you want to look at—corn,
wheat, agricultural commodities, mining commodities—
have all gone up in parabolic curves. Say you are a gold
producer with gold at US$1,500 an ounce. You cannot
hedge today. No gold company will hedge that gold production.
They could guarantee a huge amount of profits,
but they won’t do that because they think it will be going
higher. You would have been wrong if you tried to hedge
at US$900, US$1,000, US$1,100, US$1,200, and
US$1,300, so people will not hedge. They will not hedge
oil. I can think of only one company that hedges its oil.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 11, 2011, 03:55:18 PM
09.11.2011 - Q2 2011 updates listed below.

Key Metrics - These dont paste very well, just a rehash of production data and costs from the 10q.

FCF Allocation and Capex Management - Like it or love it Tom Ward is allocating every dollar of cash flow, debt, and trust money into capex. The latest trust in the Permian has been funded and capex has been raised to $1.8 billion each year until 2014. By 2015 they plan on being self funding.

Ward completed a JV on the old Miss for $250 million dollars in cash and $250 million in carries. In addition to this the company now plans to spend $250 million buying another million acres in the New Miss. This sent the market into a panic, but makes perfect sense to me. 13% of the old Miss for 100% of the new Miss, you also get the carries. Based on the last presentation they have 400,000 acres locked up. If this new acreage can be flipped for $2000 an acre - $4000 an acre via a JV, or drilled to add to their current NAV then it will be a big win. Ward said all capital plans stated do not include this new play. He also plans to make the new play self funding. This inmo means a JV, or drilling 40 - 100 wells followed quickly by a trust to recapture the cash and fund additional capex. If the New Miss is as good as the old miss regarding costs, oil percentages, type curves, and production declines then it will be a home run. If its better on any or a few of the metrics it will be a grand slam.

As a hedge Ward said he can dial back capex in the Permian because it is held by production, and is also still continuing to lock in oil hedges. They predict $2 billion or more in EBITDA in 2014, and a debt to EBITDA of 2 to 1. Plans call for another $1.4 billion in debt in 2013. It also calls $1 billion in none debt sources over the next few years. Ward has already stated he will look to do another billion dollar Miss trust (not sure if it was net or gross) at the end of the year, and will also consider selling Gas Assets, additional JVs, or retained trust units.

Based on filings and comments at presentations Ward has started drilling in the Pinion. He said he would like to see what they have before they sell it and would be spending capital on gas assets. I would like to see them sell all none core gas assets (gulf coast and east Texas), and would like to see a JV / small asset sell in the WTO, at least enough to fill the first tranche of the Century plant. Currently it looks like SD is not getting any credit for gas assets and is simply trading against WTI. They also don’t have the capital to develop everything and a JV is better then losing acreage due to not drilling inmo. The CO2 also gives SD some value which just isnt being reflected in its share price. Based on the 10k SD is also conducting a small EOR pilot program in the Permian using CO2. Interesting stuff.

General Thoughts on Company, Market, and Business - I like the fact that SD is continuing to buy new leases and entering new plays. I considered switching to CHK for this type of growth, and am happy that its available at SD. I find Tom Ward to be a much better operator, developer, and flipper of assets, and also like the fact that the bets are hedged slightly (can reduce capex and hedges).

SandRidge is the most leveraged large company I can find related to oil. They are quickly increasing the leverage and have a huge capex budget in place. I am a long term oil bull, and believe the hedges will provide protection on an oil pullback or crash due to short term macro based reasons. The hedges will however not protect SD from a long term oil crash or pullback. Either way SD is likely toast or will be sold if oil prices pullback for a long period of time. Given that I agree with increasing capex and pushing for self funding 3 years out. Its risky, but I don’t see other serious options given Management. Might as well swing for the fences and pull as much NAV forward as possible. Ward will have a hard time holding 1 million to 2 million acres by production in 5 years. It will be interesting to watch him and the CEO work this out.….

Thoughts on Investment and Stock Performance thus Far - The pullback in SDs share price is annoying, but probably warranted given the jittery markets, increased capex and risks, issues in Europe, and weak economic growth. All one can do is position themselves for the long term. Get out of options or push them out as long dated options come out and continue to watch Ward and his team execute.

I hope to see / hear additional news regarding asset sales, data / filings related to the new trusts. I am very happy thus far with the disclosures regarding capex, and 2012 - 2014 plans. Hopefully gaps continue to be closed, and additional info keeps coming out. SD is still my largest holding.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on September 12, 2011, 12:01:15 PM
hmmmmm....  which company could this be???

could fairfax be buying back the shares they sold at $11 at a 40% discount?

regards
rijk

Where do you see speculation in the markets today?
Clearly in the commodity markets. The price of gold and
oil and whatever commodity you want to look at—corn,
wheat, agricultural commodities, mining commodities—
have all gone up in parabolic curves. Say you are a gold
producer with gold at US$1,500 an ounce. You cannot
hedge today. No gold company will hedge that gold production.
They could guarantee a huge amount of profits,
but they won’t do that because they think it will be going
higher. You would have been wrong if you tried to hedge
at US$900, US$1,000, US$1,100, US$1,200, and
US$1,300, so people will not hedge. They will not hedge
oil. I can think of only one company that hedges its oil.

rijk,

I also immediately thought about SD when I read that quote from Watsa in the article and we know him and Ward are very close.
Title: Re: SD - SandRidge Energy
Post by: rijk on September 13, 2011, 05:47:43 AM
i wouldn't be surprised at all if they are buying again, they seem to think its worth around 12, because that's where they sold, so anything below 6 would be a decent buy

i think that besides the remaining 4 million common shares, they still own much more in pfds, anybody know how many?

regards
rijk

Title: Re: SD - SandRidge Energy
Post by: gordoffh on September 13, 2011, 04:26:27 PM
Tom ward is on Cramer today   Thought he did a decent job getting the play out
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 13, 2011, 06:40:28 PM
Wards gotten much better at interviewing. I agree with him, be aggressive as long as the insurance is there via hedging. We have a trust probably being announced during the next call, hopefully its paired with selling off the none core East Texas / Gulf gas, and a JV in one of the Miss plays. That would do wonders for the share price.

http://video.cnbc.com/gallery/?video=3000045442

The share price should recover as they close the funding gap. I hate to say it, but I agree with Cramer.....
With that said the Cramer bounce, will likely give way to the Cramer fall..
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on September 13, 2011, 11:42:23 PM
I will definitely hold on to my SD and enjoy the ride. And if another significant dip was to happen then I wouldn't hesitate to double down.
Ward is doing every single thing he promises to do, and unlocking value as he goes along. And he is smart enough to hedge and lock in great returns on his production for a few years out so any hit to oil prices wouldn't necessarily hurt the value of the company even though the stock would definitely feel it. I am actually wondering if I shouldn't pray for Mr Mkt to drive the price back down to $3-$4 so that I can just go all in and find something else to do for a little while.  :)
Title: Re: SD - SandRidge Energy
Post by: DCG on September 14, 2011, 07:31:08 AM
arg...another CEO referring to his company as a 'growth stock'. See the Ebix thread for my opinion CEO's that refer to their business as a stock.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on September 21, 2011, 05:11:18 PM
Wonder if I should flip my options to commons in case of prolong distressed market.. Thoughts?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 21, 2011, 05:21:41 PM
Wonder if I should flip my options to commons in case of prolong distressed market.. Thoughts?

I like all my companies, my only concern is my options strategy. Someone may call time before I get paid. I am going to wait for the 2014s and Q3 release and go from there. I think SD will work out fine, but am much more concerned about ATPG.....

I would prefer a big dip crash sooner rather than later, this range bound death by 1000 paper cuts is getting a bit old.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on September 21, 2011, 05:51:55 PM
I have the same worries. Those options are cheap - we are not paying too much premium.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on September 24, 2011, 07:09:31 PM
I am in the exact same situation as you as I am certain SD will work out fine but I am definitely worried about ATPG.  The value is there but management keeps on pissing me off.  I have been considering selling out of my position at a loss and buying more SD but it's difficult when you know it is extremely undervalued.  (I am also debating about selling out of Hanfeng at a loss but it's a difficult decision  :-(  )    Thankfully my core positions in my portfolio has been holding up rather well or the companies have a large share repurchase program in which they are able to repurchase shares on the cheap.

Wonder if I should flip my options to commons in case of prolong distressed market.. Thoughts?

I like all my companies, my only concern is my options strategy. Someone may call time before I get paid. I am going to wait for the 2014s and Q3 release and go from there. I think SD will work out fine, but am much more concerned about ATPG.....

I would prefer a big dip crash sooner rather than later, this range bound death by 1000 paper cuts is getting a bit old.
Title: Re: SD - SandRidge Energy
Post by: CONeal on September 24, 2011, 08:41:30 PM
"The value is there but management keeps on pissing me off."

Had the same problem with ATPG management In late 2009.  It was either sell the stock or take anger management classes  :D. Sold and haven't lost sleep over it. Hadn't even looked at the price till you posted.  The company is permanently off my list


SD is starting to look interesting again but wonder how the market would react if oil went to $70.  Despite the hedges in place for the next couple of years, no one else in the industry hedges like that.  Wonder if SD would be thrown out with the bath water if that were to occur?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on September 25, 2011, 07:41:35 AM
"The value is there but management keeps on pissing me off."

Had the same problem with ATPG management In late 2009.  It was either sell the stock or take anger management classes  :D. Sold and haven't lost sleep over it. Hadn't even looked at the price till you posted.  The company is permanently off my list


SD is starting to look interesting again but wonder how the market would react if oil went to $70.  Despite the hedges in place for the next couple of years, no one else in the industry hedges like that.  Wonder if SD would be thrown out with the bath water if that were to occur?

at 6, the market has priced worse.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 25, 2011, 09:34:17 PM
ATPG is quite interesting. I am very bullish about 2012 with the new production, but its always next years stock and has been that way for 3 years. I dont know how they screw up 2012 but they will likely find a way.

SD is set no matter what inmo. Grantham thinks a crash in oil will only setup the oil markets for a nice run when the downturn ends. I tend to agree. With $70 + oil they are set and have hedges in place. At $40 oil Tom Ward will do something smart via acquisition.

The risk with SD is time, with ATPG its operating risk. I have been watching for 2 years and they have yet to hit any target they have set. At this point I have huge booked gains, and decent sized none booked losses. I dont want to pay taxes in 2012 so something will be sold. I will either double down on both, wait 30 days, and then sell half. Or will sell ATPG to buy more SD. SD was priced at $6 last year, with $50-$60 oil after having done a big acquisition. It is almost a totally different company now, so $6 seems like a steal, but it could continue to selloff given whats going on in the markets.

I plan to hold my cash until the market makes me an offer I cant refuse outside of tax loss selling. We may get SD, or CHK convertible preferreds yielding 8.5%, or may get MLPs with hedged production at 20% yields again.
Title: Re: SD - SandRidge Energy
Post by: CONeal on September 27, 2011, 12:18:53 AM
Myth,

Regarding SD just throwing a couple of things out that you might want to keep in mind the next 30 days.  Last year the stock got down to the low $4 range due to worry of debt.  While by and large the hedges will help against it, the market seems to pick on SD during times of stress like its a step child.  In the short term (next 45 days) I think there may be some serious volitity with SD if you looking to add more for the following reasons.

1.  The market will be rough in general as the solution for what to do with Greece gets closer to resolution.  Suppose to have a plan in place by Nov. 7th if I remember correctly.  This is the main reason why I think oil might touch $70.  Of course I expect the fear mongering media to play their role for ratings. :-)

2.  Tom Ward's yearly tax selling of shares will be around that time.  Was Oct. 5th and 6th last year.  His tax issues maybe known in advance but it seems like people forget about it every year.

If both of those variables play out close together  :o is what some people will see regarding the share price.

I don't hold any shares right now mainly b/c I'm fully invested but if an opportunity presents itself around $4 I might have to reconsider.

Just some things you might want to keep in mind.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 27, 2011, 02:54:10 AM
I agree, and have stopped buying the dip, for the reasons you have listed. For some reason SD trades in line with WTI, even though they are fully hedged. Its not as bad at ATPG, but they still selloff pretty hard on any sort of bad news whether its related to the market or oil and gas.

I think Greece has a few more innings and the volatility will continue. Europe doesnt want to solve the problem, and inmo will keep doing half measures which only kick the can. So the big focus for me is on harvesting tax losses, while maintaining a decent position. It would be hard though to avoid adding at $4, especially with all the changes.....
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 27, 2011, 01:26:08 PM
Another step in the right direction. Only 25k acres. Not bad

http://www.prnewswire.com/news-releases/sandridge-energy-inc-signs-agreement-to-sell-certain-east-texas-properties-for-231-million-and-announces-revised-production-guidance-130656003.html

Soon SD will be New Miss, Old Miss, and WTO. Hopefully we have JVs and Trusts on all 3 by this time next year. I think we will have a trust announcement on Q3 release, and perhaps 1 more asset sale by year end. My money would be on for a sell of the Gulf Coast / Other assets.

The SD story is becoming an easy one. Hopefully they use the 5% move in WTI to continue hedging.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDQwNzI4fENoaWxkSUQ9NDYyNzUyfFR5cGU9MQ==&t=1
I like the new Logo  :).
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on September 28, 2011, 05:32:02 PM
Getting crashed again.
Would not feel as worry if my position is 100% commons.
Leverage has a price.
Title: Re: SD - SandRidge Energy
Post by: rijk on September 29, 2011, 07:46:49 AM
how much pfds does fairfax still own?

regards
rijk
Title: Re: SD - SandRidge Energy
Post by: Myth465 on September 29, 2011, 04:57:08 PM
I believe they still own the convertible preferreds. Also alert I like leverage but this is proving painful. My plan is to hold cash, instead of holding a10% common position, I would prefer a 2% options position with 8% cash, role over the options and scale in once you think the turn has happened....
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on September 30, 2011, 06:08:44 PM
Seriously, is the world ending? >:(
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 01, 2011, 06:32:18 AM
I think we are all paying a fun game of do you know what you hold. Honestly I really like SD and see value in ATPG.

The world wont end, but oil could trade down to 40 thoughout this mess. That means SD at $4 or $3 which makes no sense, but may happen. I plan to double down one more time, then sell 50% of the position for tax loses. I will do so once the 2014s come out. I am a long term oil bull, but at this time we have a bear market coming. Its when fortunes are made and lost.....

I like SD and oil and will stick with it until 2014. I hope the selloff continues because I would like an extremely low basis...
I say brush up on your buy list. Everything you like may just go on sell, for me thats ESV, FTP, SD, ATPG, MERC, and a few others
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 01, 2011, 02:32:42 PM
Quote
Seriously, is the world ending? >:(

Lol... I'm not sure but my portfolio is behaving as if judgement day was around the corner :)

Quote

The world wont end, but oil could trade down to 40 thoughout this mess. That means SD at $4 or $3 which makes no sense, but may happen. I plan to double down one more time, then sell 50% of the position for tax loses. I will do so once the 2014s come out. I am a long term oil bull, but at this time we have a bear market coming. Its when fortunes are made and lost.....

I like SD and oil and will stick with it until 2014. I hope the selloff continues because I would like an extremely low basis...
I say brush up on your buy list. Everything you like may just go on sell, for me thats ESV, FTP, SD, ATPG, MERC, and a few others

I agree with this. Whatever nonsense we're going through right now will allow some people to get rich 3-5 years out for sure.
Personally I have 2 problems:
1. Raising cash fast enough
2. Me! As, I've been pulling the trigger sporadically the last few weeks. But I've decided to put the gun down and just wait for the dust to settle. I will scale back in eventually when the dust settles, but I'm not sure I'll be able to control myself if/when SD goes back down below $5.

I really like ESV, it's on my watchlist. I think a lot of money will be made if it continues to go lower and I will wait for 2014 LEAPS and get in hopefully the dust will have settled by then.

I was never confident enough in myself understanding the industry to buy into MERC, FBK, FTP etc... but I swear to God that if MERC goes back to 25 cents (or if say SD goes below 3 bucks), I'm selling my clothes and furniture and buying stocks  ;D
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 01, 2011, 02:42:11 PM
I really like this Oped in today's Journal

http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html?mod=WSJ_Opinion_LEADTop (http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html?mod=WSJ_Opinion_LEADTop)
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on October 01, 2011, 05:08:02 PM
I bot a bunch of SD Friday, I don't have much cash left at all! My plan is to replace options with commons eventually.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on October 01, 2011, 08:56:36 PM
I was debating if I should add as well but I am still holding off buying every large dip.  There will be a price I won't be able to help myself and we are getting close to it.  I sold my position in HF so I have a bit of cash.  I may also sell my position in ATPG and buy more SD but I have not decided as of yet.  Hmmm...

Thanks,
s

I bot a bunch of SD Friday, I don't have much cash left at all! My plan is to replace options with commons eventually.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 02, 2011, 01:06:00 AM
ourkid8 thats what I decided last month or so. At some point the market will make me an offer I cant refuse, until then I am just watching.
Title: Re: SD - SandRidge Energy
Post by: tombgrt on October 02, 2011, 05:55:04 AM
I have read about SD a bit yesterday as I became interested because of the share price plunge.

As far as I understand, Ward is upping capex because he is seeing tremendous value (2nd missi play etc.) while the company is already indebted big time. What do people here view as estimates of total asset value? When is he going to shift his focus to growing cash flow instead of raising assets? I saw that he had a 3-year plan but why doesn't he sell off more of the natural gaz assets at depressed prices and more of the first missi play. Losing some upside but providing in more solvability in current scary times doesn't look that bad to me? What will keep Ward from further upping capex in 2012 and beyond and not getting out of the debt mess?

What are the arguments for some people to buy leaps in an already leveraged company in the current environment? Is it an all or nothing bet anyway where you better bet the farm?

Just some thoughts/concerns and I would be very grateful if someone could shed some light on it.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 02, 2011, 04:12:23 PM
l will give it a go.

1. As far as I understand, Ward is upping capex because he is seeing tremendous value (2nd missi play etc.) while the company is already indebted big time. What do people here view as estimates of total asset value?

This is a tough one, depends on long term oil and gas prices. They view total asset value at $36 after debt is taken into account. That was with $100 WTI and $5 gas I think. Thats after everything is developed. Obviously you wouldnt pay that much, and its for sure gone down with $80 oil and $4 gas. I believe Oil and Gas will go up over the long term, but we could see any price now.

2. When is he going to shift his focus to growing cash flow instead of raising assets? - End of 2014 they will be self funding, at least thats the plan.

3. I saw that he had a 3-year plan but why doesn't he sell off more of the natural gaz assets at depressed prices and more of the first missi play. Losing some upside but providing in more solvability in current scary times doesn't look that bad to me? - Basically the JV came out of no where. They raised $250 mill in cash and $250 n carries. Next they used that to buy the old miss. The goal is to hold as much as the old and new miss as possible, and then do infill drilling once its HBP. Selling the natural gas is a bad idea, they have the Pinion field locked up data wise, and also have a huge CO2 plant there. Companies like Oxy need the CEO for enhanced oil recovery, so its not exactly a pure natural gas play. SD is doing some drilling in the field to see exactly what they have, and in the meantime selling non core assets / gas. Soon Gulf inmo will be sold, and we will see a sell / JV in the Pinion once they have a full understanding of whats there.

3. What will keep Ward from further upping capex in 2012 and beyond and not getting out of the debt mess? - The market / drop in oil prices. I like upping capex. SD would be foolish to stop drilling, and pay down debt. Production would noise dive, and they would lose a bunch of land due to it not being HBP. I prefer the all in strategy given the situation. Also no real new debt has been added, yet. Debt will come in 2013 towards teh end, and by then we should know where things are going. Better to ramp up production and grow into debt.

4. What are the arguments for some people to buy leaps in an already leveraged company in the current environment? Is it an all or nothing bet anyway where you better bet the farm? - Leaps go both ways, you could go all in or nothing as I may end up doing, or could buy a 3%  position, and if SD goes to $13 by 2014 you are up 355%......


Just some thoughts/concerns and I would be very grateful if someone could shed some light on it. - Let me know if you have any questions. Bottom line in my opinion, if you are long term bullish on oil and gas - SD and CHK are one of the best ways to play the turn. If you want to throw time into the mix or limit your position consider using leaps.
Title: Re: SD - SandRidge Energy
Post by: tombgrt on October 02, 2011, 04:33:23 PM
Thanks a lot Myth, your post is of tremendous value and definitely gives me a quicker overview than I could find myself in half a day.  ;)

I'm going to look into it further when I find some time, thanks again. :)
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on October 03, 2011, 02:38:30 PM
 Has the market made you an offer you cannot refuse yet? I am at my offer price but I still did not pull the trigger yet... this is unbelievable how this stock is selling off at this leve. 

S

ourkid8 thats what I decided last month or so. At some point the market will make me an offer I cant refuse, until then I am just watching.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 03, 2011, 03:01:02 PM
No. Its close. I have decided that we could see any price. Even $2, and no longer get excited by 10% moves lol. Basically if the market or WTI moves 2%-3% we will move more, maybe 2 - 3 x more. I think the market has more to go, but not sure about us. Eventually you run out of room lol. If I had no position here, I would buy 10% - 15% of a full position.

I am severally overweight oil and gas, and am looking to expand my position and take loses. We could see $50 oil, so I am waiting until some sort of bottom. If I miss it not bad, I have more than enough. I will buy tomorrow though if Tom Ward pulls off another transaction in this market, not sure if trusts will be marketable. I have a stock yielding 14% in my portfolio.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 03, 2011, 03:08:34 PM
l will give it a go.

1. As far as I understand, Ward is upping capex because he is seeing tremendous value (2nd missi play etc.) while the company is already indebted big time. What do people here view as estimates of total asset value?

This is a tough one, depends on long term oil and gas prices. They view total asset value at $36 after debt is taken into account. That was with $100 WTI and $5 gas I think. Thats after everything is developed. Obviously you wouldnt pay that much, and its for sure gone down with $80 oil and $4 gas. I believe Oil and Gas will go up over the long term, but we could see any price now.

2. When is he going to shift his focus to growing cash flow instead of raising assets? - End of 2014 they will be self funding, at least thats the plan.

3. I saw that he had a 3-year plan but why doesn't he sell off more of the natural gaz assets at depressed prices and more of the first missi play. Losing some upside but providing in more solvability in current scary times doesn't look that bad to me? - Basically the JV came out of no where. They raised $250 mill in cash and $250 n carries. Next they used that to buy the old miss. The goal is to hold as much as the old and new miss as possible, and then do infill drilling once its HBP. Selling the natural gas is a bad idea, they have the Pinion field locked up data wise, and also have a huge CO2 plant there. Companies like Oxy need the CEO for enhanced oil recovery, so its not exactly a pure natural gas play. SD is doing some drilling in the field to see exactly what they have, and in the meantime selling non core assets / gas. Soon Gulf inmo will be sold, and we will see a sell / JV in the Pinion once they have a full understanding of whats there.

3. What will keep Ward from further upping capex in 2012 and beyond and not getting out of the debt mess? - The market / drop in oil prices. I like upping capex. SD would be foolish to stop drilling, and pay down debt. Production would noise dive, and they would lose a bunch of land due to it not being HBP. I prefer the all in strategy given the situation. Also no real new debt has been added, yet. Debt will come in 2013 towards teh end, and by then we should know where things are going. Better to ramp up production and grow into debt.

4. What are the arguments for some people to buy leaps in an already leveraged company in the current environment? Is it an all or nothing bet anyway where you better bet the farm? - Leaps go both ways, you could go all in or nothing as I may end up doing, or could buy a 3%  position, and if SD goes to $13 by 2014 you are up 355%......


Just some thoughts/concerns and I would be very grateful if someone could shed some light on it. - Let me know if you have any questions. Bottom line in my opinion, if you are long term bullish on oil and gas - SD and CHK are one of the best ways to play the turn. If you want to throw time into the mix or limit your position consider using leaps.

Nice summary Myth,

Quote
3. What will keep Ward from further upping capex in 2012 and beyond and not getting out of the debt mess? - The market / drop in oil prices. I like upping capex. SD would be foolish to stop drilling, and pay down debt. Production would noise dive, and they would lose a bunch of land due to it not being HBP. I prefer the all in strategy given the situation. Also no real new debt has been added, yet. Debt will come in 2013 towards teh end, and by then we should know where things are going. Better to ramp up production and grow into debt.

Also the underlying point here is that it would definitely be crazy to stop drilling given that they have locked in revenues above or around $90 through hedges (i can't remember the exact % but I think Ward said more than 80% of their production was hedged at high prices) so even if the economy falters and oil drops to $30, it still wouldn't make sense for them to stop drilling unless you think that it will drop and stay there until 2016. Their upping production is part of their strategy to be self funded in a few years as the guaranteed revenue is as important as the JVs and trusts Ward has been signing to clean up their financial standing.
But I think that ultimately with a highly leveraged company with an ambitious plan like SD, it has to be a bet on management to keep delivering on their promises and they haven't disappointed so far, to me the fact that Watsa and the Fairfax team went all in with Ward was the vote of confidence I needed, and I wouldn't be surpised if they were back to buying right now. But if you pick up their proxy don't spend too much time on his compensation for your own sake lol... Dude sure pays himself a lot of money.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 05, 2011, 07:30:26 AM
Great presentation. Ward touches on just about everything. Where are those 2014 leaps ....

http://wsw.com/webcast/jr12/sd/

I like the you didnt like Arena, didnt like Forest, didnt like the switch to oil, didnt like the Old Miss, and you will be thanking me for the new miss when thats all done...
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 13, 2011, 09:47:40 AM

http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTEtMjcwMjYzL3htbA%3d%3d (http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTEtMjcwMjYzL3htbA%3d%3d)

Asset sale that we've been thinking was around the corner.

Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 13, 2011, 11:04:33 AM
Great presentation. Ward touches on just about everything. Where are those 2014 leaps ....

http://wsw.com/webcast/jr12/sd/

I like the you didnt like Arena, didnt like Forest, didnt like the switch to oil, didnt like the Old Miss, and you will be thanking me for the new miss when thats all done...

Great presentation. He does seem more combative than usual, he's probably getting tired of people doubting his assets acquisitions even though they've all delivered so far and also doubting his hedging.
I notice at the beginning of the presentation he briefly says "we just sold our East Texas asset" I didn't know until the 8-K today, but then again it was expected.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 14, 2011, 02:50:17 PM
Where are those 2014 leaps ....

I think SD is in Cycle 3 and 2014 LEAPS will be listed on November 14

http://www.888options.com/help/faq/leaps.jsp#5 (http://www.888options.com/help/faq/leaps.jsp#5)
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 16, 2011, 08:26:08 PM
Thanks for all the links AZ. I am really growing to like this company and can see holding a smaller core position for quite a while. I hope to push out my $5 leaps to 2014 then to exercise the ones in my taxable account by then should things go as planned. I will trade the ones in my Roth depending on the situation. I am starting to understand Lampert more and more, and why he holds companies for so long.

Good catch on the East Texas, didnt hear that in the presentation. He is selling assets which no one is assigning value to for $250 million each time. It will be interesting to see what happens in the Pinion / WTO. Ward has done a good number of transactions each quarter so I dont expect Q4 to be a quiet one.

Time to throw out more predictions. Some of these are more like throwing darts.

Ward buys more than 1 million acres in the New Miss / or starts another play which angers shareholders.

We see a JV or Asset sell in the New Miss which provides seed capital for the first 50 wells or so, this will be followed by other sells / JV. This new miss will fund itself and provide a very high ROR on its initial seed capital.

Eventually it will fund another play, this will be how he avoids angering share holders going forward. He will essentially divide the company into 2 companies. A production company which has targets, funding, and metrics which are hit - and an Exploration company which was started with $250 million dollars, grows into a multi billion dollar company, and is entirely self funded. Perhaps it will return the seed capital back to company 1. This is what I would do, and it would allow him to continue the model CHK had without annoying the hell out of shareholders.

Ward does 1-2 more trusts. 1 in the Old Miss, and 1 perhaps in the Permian. These will be done much quicker to prevent what happened during the Trust 2 marketing.

Something happens in the WTO - Sale or more likely JV. We just cant drill here, and we have contracts to deliver CO2 which helps many companies and perhaps us in the Permian.

Nothing involving debt or shares happens, with the exception of perhaps lowering rates / pushing out maturities.

Thats all I have for now.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on October 18, 2011, 07:31:48 PM
With their assets, oil productions and growth rate, I would be surprised if they are not getting calls for M&A opportunities. This one will be money good just not sure if my options will.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on October 21, 2011, 02:44:34 PM
Crap! Our guy made the list @ number 2. Lol...

Well, it's never been a secret that we're paying him a boat load of money.

http://247wallst.com/2011/10/20/america%e2%80%99s-most-overpaid-ceos/3/ (http://247wallst.com/2011/10/20/america%e2%80%99s-most-overpaid-ceos/3/)
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on October 21, 2011, 04:02:05 PM
yeah... it's fine as long as he delivers. He executes well so far.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on October 21, 2011, 08:26:14 PM
I make it a point not to read the proxy statement  :D. Honestly he has created value from where I bought the stock, but it sucks for anyone who got in at $30 - $60.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 03, 2011, 01:41:10 PM
Third quarter results out....

http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1626102&highlight=


Cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 03, 2011, 03:59:00 PM
hmmm.. down a bit after hours. I guess people don't like the fact that they lower than production guidance which they upped August. New Miss play up to 700k. Soon, we may have a new trust IPO every quarter or so.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 05, 2011, 09:03:49 AM
Listened to the CC, nothing new except about possible improvement of drill sizing. The equipment bottleneck will be solved as they shift the right to Miss. Will tell us more about new play by end year when they load up. Hope EU doesn't blow up - home run in making.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on November 05, 2011, 10:13:46 AM
thought this was a pretty telling analysis from another board

from CC quote tom ward
"Our company has developed and dominates 2 of the most capital-efficient projects in the U.S. today. In the Miss, each time we drill a well and spend $3 million, we create a net present value of an additional $4.9 million. And in the Central Basin Platform, when we spend $760,000, we create $1 million of net present value. I'm very proud that we have taken the route of high-quality reservoirs at shallow depths with scalable plays, where cost can be controlled."



Here's a back of the envelope calculation of expected stock price appreciation for 2012 based on Ward's statements regarding the additional NPV for each well drilled.

28 rigs in the Miss 1 and 12 rigs in the Per in 2012
It takes 21 days to drill a well from past presentations
So for 2012 additional NPV is estimated to be
(365/21)*((28*$4.9M)+(12*$1M)) = $2,593M

which is approximately $5 per share expected appreciation during 2012

Title: Re: SD - SandRidge Energy
Post by: AZ_Value on November 18, 2011, 04:21:03 PM
Poor Charlie posted the link below about Ward in the CHK thread and I thought it was a good read

Quote

Interesting article about Aubrey from Forbes Oct issue:  http://www.forbes.com/forbes/2011/1024/feature-aubrey-mcclendon-hero-energy-chesapeake-risk-christopher-helman.html

Also for those following Sandridge:  http://findarticles.com/p/articles/mi_qn4182/is_20070108/ai_n17108190/

Title: Re: SD - SandRidge Energy
Post by: abcd on December 22, 2011, 12:26:32 PM
http://www.marketwatch.com/story/sandridge-energy-inc-announces-1-billion-mississippian-joint-venture-2011-12-22
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 22, 2011, 07:01:12 PM
Interesting, I thought they are getting this price for the proven area... but it's actually the new play. nice deal.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 23, 2011, 12:02:13 AM
Not bad. Not bad. I almost bought more in the low $6s
Title: Re: SD - SandRidge Energy
Post by: gordoffh on December 23, 2011, 04:01:43 AM
well i have to admit i was getting a tad nervous with the stock reaction after the last quarter announcement of the new land leases - i did continue to buy and SD is by far my largest postion - nice christmas present - ward appears to have everything in place to carry out his 3 year plan with some nice hedging just in case - and they still have all that gas and i see their new partner is big in LNG - the upside looks very promising
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 23, 2011, 06:16:56 AM
Ward executes really well. Sharp contrast to ATPG.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on December 23, 2011, 06:19:04 AM
Heavy volume pre market. There were a lot of shorts on this stock. I think we longs deserve a run after that disaster in august
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 23, 2011, 03:46:41 PM
Heavy volume pre market. There were a lot of shorts on this stock. I think we longs deserve a run after that disaster in august
Agreed, been very painful the last few months.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 23, 2011, 04:18:12 PM
Heavy volume pre market. There were a lot of shorts on this stock. I think we longs deserve a run after that disaster in august
Agreed, been very painful the last few months.

Yup, especially for those stupid options holders. (me).
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on January 20, 2012, 08:11:36 PM
back to mid 7.

I guess with gas at mid 2, their 40% gas production won't be pretty.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 01, 2012, 04:19:33 PM
Well, TW has done it again.....

http://www.reuters.com/article/2012/02/01/dynamicoffshore-sandridge-idUSL4E8D17R720120201?feedType=RSS&feedName=rbssFinancialServicesAndRealEstateNews&rpc=43

Designed to add cashflow to SD to fund drilling?

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 01, 2012, 04:32:33 PM
I am going to load up if it gets to 6s tmw.
It's not bad news.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 01, 2012, 05:32:47 PM
Just saw the news - sure would be nice if it would have been up after hours since it is my largest holding - from what I have read so far doesn't seem to be a terrible deal - ward being seen as a cowboy again- has recovered from the lows - hope you don,t get the opportunity to buy in the 6's -
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 01, 2012, 05:44:45 PM
looks from the surface, it's a deal that reduces both risk & upside. Anyone have access to the IPO prospectus for http://www.dynamicosr.com/?

Title: Re: SD - SandRidge Energy
Post by: oldye on February 01, 2012, 07:03:37 PM
If you don't mind me asking, why is this your largest holding? 
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 01, 2012, 08:29:55 PM
This is my second largest holding... Alot of the position being gains, and alot from pushing in more and more. I like Oil and Gas, and love Tom Ward / SD. Its like a much less complex CHK with less gas, more oil, and only 3 major plays.

On the surface and without seeing the details of this deal, I like it. I thought Ward would sell 500k Miss Acreage for $2 billion (cash and carries), and then sit on his hands for 4 years focusing on operations. I view that as the COOs job, and would prefer Ward sniffing around for cheap deals. I figured at most we would get a trust every 6 months and the share price would be stuck at $10 till 2014.

I also have missed the boat on a few big deals which crashed. I knew the stocks well, but sat on my hands. We have FTP, ATSG, WDC, SD, Petrobank, Petrobakken. All crashed - some more than 50%, and all have recovered or are recovering. I own 2013 Leaps and will buy some 2014s and wait until SD is back to $9. Ward has likely already worked out a $2 billion dollar deal for 500k acres of Miss land, may sell the legacy Gulf Coast Assets, and is doing a big trust. We also have a potential recovery in Nat Gas, and perhaps a spike in Oil due to Iran or a recovery.

I only see 2 risks. A fall off in oil prices due to the economy, and execution risk (which I view as low). The only major thing I dont like about this deal is its offshore. I dont really like that space. Many questioned his shift from Gas / We would be bankrupt if he hadnt have given up the gas upside as some said he was doing......

----

Ward has earned a long piece of rope. His only bad deals had to do with his original acquisition of SD shares, and his purchases related to Nat Gas. I dont think he can go wrong when buying oil assets (Arena, Old Miss, New Miss), and I believe its a buy if you like the Oil space. I cant wait to hear the call tomorrow, and see the updated presentation once this deal closes.

I will buy if we get below $6.75 or so.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 01, 2012, 08:50:20 PM
Seems like a steal. Deleverages SD a bit. 50% production and reserves in gas means we may have bought gas fairly low depending on the PV10 pricing ($2.8). The issue is SD though can add reserves for years due to drilling rules and how reserves are booked. Reserve replacement will be quite high year after year. With us using 50% shares we are giving awhile some upside, unless this company has tons of unbooked reserves as well.

Ward either wants the debt issue off the table, or sees upside in infill drilling. 80% proved reserves means not much reinvestment and auctual FCF from the properties. The call will be very interesting. Arena had tons up upside, so did the other oil acquisition. The question is aside from the PV10 discount is this company as undervalued as SD. If not then they have basically issued shares to reduce leverage to a degree.

74 million shares vs fully diluted count of 512 million is fairly significant. Based on the metrics we are giving away upside. Ward rarely gives away upside, so I cant wait to see what he sees. We see a bit tomorrow, and it all when it closes. Upon reflection Ward has fleeced most of the folks sitting across the table from him on the last few deals - especially on his last 2 take overs / unders....

Tom L. Ward, Chairman and CEO of SandRidge, commented, "The value of this acquisition will be evident immediately in our results. We are acquiring these assets for less than PV-10 of the proved developed reserves and at just over $50,000 per flowing barrel. Additionally, we expect these operations to contribute significant free cash flow in excess of the anticipated annual drilling and recompletion capital budget of $200 million."
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 01, 2012, 09:24:54 PM
Posted by: oldye
« on: Today at 07:03:37 PM » Insert Quote
If you don't mind me asking, why is this your largest holding? 

Originally got in when fairfax bought in and generally liked the sector - the story was intriguing and myth has laid it out very well so no need to repeat other than I did sell half of my position last march and have since bought back and then some at lower prices - playing with some house money -

Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 02, 2012, 05:41:27 AM
SD under 7 in pre market so for those who were going to add you might get the opportunity - I will probably sell a little PBN and add myself although I would rather see stock jump a dollar or more after a bravo conference call where ward presents the acquisition as a no brainer and the market responds
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 02, 2012, 05:06:49 PM
SD under 7 in pre market so for those who were going to add you might get the opportunity - I will probably sell a little PBN and add myself although I would rather see stock jump a dollar or more after a bravo conference call where ward presents the acquisition as a no brainer and the market responds

Market doesn't like risky growth before and now is not happy with the reduced growth with lower risk.
Tom keeps saying it's cheap - not sure what he is seeing that the market doesn't yet.
Title: Re: SD - SandRidge Energy
Post by: oldye on February 02, 2012, 06:10:52 PM

Quote

Market doesn't like risky growth before and now is not happy with the reduced growth with lower risk.
Tom keeps saying it's cheap - not sure what he is seeing that the market doesn't yet.

Considering maintenance capex and interest, you don't have much left over to account for dilution. 
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 02, 2012, 07:49:10 PM

Quote

Market doesn't like risky growth before and now is not happy with the reduced growth with lower risk.
Tom keeps saying it's cheap - not sure what he is seeing that the market doesn't yet.

Considering maintenance capex and interest, you don't have much left over to account for dilution. 

They do have more fund to fund their Mis play now. The picture will look much clear when the next trust is done and when the 500k acres is sold. I think I will switch my options to shares. This guy is willing to give up short term pps to grow the company.

Applies DOR's metrics to ATPG is a good exercise. ATPGP is a buy.
Title: Re: SD - SandRidge Energy
Post by: txlaw on February 02, 2012, 08:38:35 PM
Hey Myth,

So you're in Oz right now, yeah?  Are you seeing anything interesting out there in terms of nat gas consumption and production? 

I know that they've got that big Gorgon field that is supposed to produce for 50 years or something, but I don't really hear much about Oz when it comes to nat gas.

What are the Aussie's takes on LNG, a possible global nat gas market, and nat gas prices?

-txlaw
Title: Re: SD - SandRidge Energy
Post by: txlaw on February 02, 2012, 08:39:31 PM
Also, did you listen to the CC?  Was Ward persuasive regarding the rationale for this transaction?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 02, 2012, 08:47:56 PM
I did, the one thing that stands out is tom may buy more oil assets if the price is right. He said the price was cheap in gom.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 03, 2012, 10:44:49 PM
I have listened to the management prepared comments, havent hit the Q&A yet.

I am starting to see Tom Ward as a value investor. He will close the funding gap with a sell of 500k acres and will focus on rolling up more assets in the gulf. This bodes well for CHK shareholders because it also shows that there are no more new plays to find on land. When you look at the SD map you have to ask yourself why they didnt sell the none core Gulf Coast assets.

I didnt realize these were offshore, and on the call SD said they have been operating offshore for 5 years. With this acquisition these properties will be combined and that will be a core area along with the Miss, Permian, and Pinion / Legacy gas fields. With the other acquisitions they pretty much fired the Management teams of the acquired properties. Here they are trying to role in and retain some of the key offshore team. When he spoke of the acquired company buying assets for $100 million which had a PV10 value of $400 million you should see where he was going.

Ward will continue to buy assets for cheap, and sell them via Trusts, JVs, and Direct Sale for fair price to expensive. He bought onshore and sold off bits and pieces for pretty good prices, and will continue to do it but now focusing on offshore. I think SD will be better for it, and shareholders will be rewarded eventually.

---

Nat gas here sales for a more reasonable price and they are exporting it to Asia. I havent looked into it, but they have a ton of gas here and even have Nat Gas / LNG cars on the road. I dont like gas generally, and avoid companies which focus on it. I do own TAT which does alot of gas drilling in Turkey. Gas sales for $8 there. I think A global Nat Gas market will simple lower the price of gas globally. Europe probably has alot of shale gas, and as more is found the price will simple fall. The only hope for gas inmo is for us to switch more applications to it.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 03, 2012, 10:54:39 PM
Very Good article. I agree with his take. The Gulf assets should have been sold similar to the East Texas assets. I couldnt figure out why they held on to them, given that they were non core and SD needs the cash. Now it kind of makes sense.

http://seekingalpha.com/article/339001-sandridge-ceo-tom-ward-has-an-interesting-reason-for-his-acquisition-of-dynamic-offshore-it-came-cheap

My take away from the call was basically this. Sandridge actually has a small amount of exposure to the Gulf of Mexico. Last year Sandridge started shopping these assets in order to raise cash for its onshore programs.

What Tom Ward and Sandridge found was that the offers for Sandridge's offshore properties were outrageously low. Generally, the offers Sandridge received were for 1.5 to 2 times cash flow. Sandridge politely declined these offers but upon further investigation found that other companies were actually selling Gulf of Mexico shelf assets for these kinds of prices.

The lightbulb then obviously went off for Ward and Sandridge. Ward wants to make Sandridge as oil focused as possible, and also reduce leverage. The cheapest way to do so right now is apparently buying properties in the Gulf of Mexico. As Ward observed in the conference call, you can't buy production at two times cash flow onshore.


http://www.gurufocus.com/news/160142/boone-pickens-outlook-for-oil-and-natural-gas-prices

This is another good link. Didnt know Nat Gas was $15 in the mid east, wonder why. I thought they would be swimming in the stuff.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 04, 2012, 07:25:04 AM
This should trade higher. But it will take some times, most will want to see how DOR operations will get integrated into SD's before committing more $ to SD.

I added to my position and will close my 13 LEAPS (at a loss) to fund more commons. I think the acquisition remove the funding risk to move the onshore to a safe cash cow plays. But depends on how Ward play his cards, it may take longer.

If they do couple more of DOR (debt increase 2b and share diluted 50%). They would generate cash to play down debt pretty fast.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 06, 2012, 06:38:18 AM
I bought more today. We have a conference tomorrow, and I think Ward has something locked up for the last 500k already. A few more catalysts kicking around. I will close up my 2013 leaps on a rebound and hold the 2014s I am buying...
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on February 06, 2012, 10:02:28 AM
I added to my position and will close my 13 LEAPS (at a loss) to fund more commons.

You just expressed my own position. I have 2013 LEAPS to close like you and will see what other entry points I'm given going forward.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 06, 2012, 01:55:48 PM
New presentation out today. Looks good....

http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-presentations

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 06, 2012, 03:43:36 PM
For those of you that have 2013 leaps and are rolling over to 2014 are they in the money leaps? I have a number of 2.50 and 5.00 dollars leaps and plan on holding for awhile. Just curious if anyone had these calls. The new presentation looks good. This company is in such a better position than last spring when it hit 13.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 06, 2012, 05:31:37 PM
I have $5 calls, but the basis is higher at $4. I sold last years calls for a pretty nice gain, and bought these a bit later. They are underwater, but should hit par at some point this year. I bought 2014s at $3.5 and plan to hold those and trade out of the 2013s.

Ward is hard to follow, but is making the right decisions inmo. I like the presentation, like the plan to monetize less acreage (now down to 250k). Hopefully they issue long dated bonds  and continue to push out maturities. I would like for them to recall the 2016 9% bonds and issue new ones at 7.5%. I hope he continues to acquire assets at 2-3x CF, and continues selling acreage for dollars that he bought for pennies.

I am severely overweight SD, and look forward to a rally so I can get back to a normal position.
Title: Re: SD - SandRidge Energy
Post by: biaggio on February 06, 2012, 06:59:05 PM
interesting thoughts on natural gas, including cash costs for various canadian and U.S producers.

http://www.peyto.com/ia/pmr/20120201PMR.pdf

Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 15, 2012, 12:19:59 AM
http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTItMDYwNzg3L3htbA%3d%3d

Looks like our recent buys were well timed. I love when someone smarter then me loads up around the same time. This time hopefully I can sell as well as Prem.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 15, 2012, 04:06:38 AM
myth      this time i will pay more attention to when he sells - the last time they unloaded was right before the big sell off but certainly nice to see him buy back in amd adds more to the whole story
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 15, 2012, 04:48:39 AM
market timer! ;)
Title: Re: SD - SandRidge Energy
Post by: rijk on February 15, 2012, 05:09:16 AM
does this indicate that fairfax purchased approx 30 million shares (from 4 to 34 million) in 2012 (no sd activity in recent 13-F) at prices > $7/share????

is it possible that part of the 30 million are pfd conversions? if i remember correctly, the conversion rate was around $8......

regards
rijk
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 15, 2012, 05:39:31 AM
Isnt the 13f 12/31. I dont think its converts because those go on for a fwe years. Why convert vs. enjoying 7.5% till 2013 or 2015 or whatever. I think these or most of them are share purchases....
Title: Re: SD - SandRidge Energy
Post by: rijk on February 15, 2012, 06:02:31 AM
correct, 13-F date is 31/12, that's how i deduct that the 30 million must have been purchased in 2012 at prices > $7......

based on below information (think there are more pfds outstanding with different terms) the conversion price is $10.86 and the latest conversion date would be dec 2014.....

regards
rijk


***
Private Placement of 6.0% Convertible Perpetual Preferred Stock. In December 2009, we completed a private placement of 2,000,000 shares of our 6.0% convertible perpetual preferred stock to an institutional investor in a transaction exempt from registration under Regulation D under the Securities Act. Net proceeds were approximately $199.9 million and were used to fund a portion of the Forest Acquisition purchase price and for general corporate purposes.

Each share of the 6.0% convertible perpetual preferred stock has a liquidation preference of $100.00 and is entitled to an annual dividend of $6.00 payable semi-annually in cash, common stock or any combination thereof, beginning on July 15, 2010. Additionally, each share is initially convertible into 9.21 shares of our common stock, at the holder’s option, at any time on or after February 1, 2010 based on an initial conversion price of $10.86 and subject to customary adjustments in certain circumstances. Five years after their issuance, all outstanding shares of the convertible preferred stock will be converted automatically into shares of our common stock at the then-prevailing conversion price as long as all dividends accrued at that time have been paid.

Title: Re: SD - SandRidge Energy
Post by: FFHMCNALLY on February 15, 2012, 07:29:16 AM
Item 4 (Ownership) of the 13G states:  "Shares reported as beneficially owned include Shares issuable upon conversion of certain convertible securities of SandRidge Energy, Inc."  I don't think there are any new purchases.

Regards,

Rob
Title: Re: SD - SandRidge Energy
Post by: rijk on February 15, 2012, 08:27:41 AM
thanks ffhmcnally,  think you are right, the filing also refers to december 31, 2011 as the "date of event which requires filing of this statement", i.e. if common shares would have been purchased in 2011, this would have shown in the most recent 13-F

regards
rijk
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 21, 2012, 06:23:14 PM
Ya looks like I was just plain off. I even checked a few of the forms looking for info on the converts, but missed that note at the bottom. Interesting that he has enough to own 8% of the company after preferreds convert, but that will go down with the DOR acquisition. Does anyone know how many preferreds were owned. We know there were 4 million shares at year end.

Also if Prem does a transaction would he have to file? He owns over 5% on a converted basis, but not via common. I am not sure what the rules are in this situation.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 22, 2012, 12:24:53 PM
Can,t say I am impressed with price action going into earnings tomorrow. Perhaps negativity can lead to surprise and different action than last 2 quarters
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on February 23, 2012, 01:43:41 PM
Can,t say I am impressed with price action going into earnings tomorrow. Perhaps negativity can lead to surprise and different action than last 2 quarters

I really think Mr. Market just doesn't know what to think, he doesn't know if he should like or hate the recent purchase of the offshore assets, he doesn't even know if he should like or hate the recent increase in global oil prices... Poor guy has all the symptoms of a nervous breakdown.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on February 23, 2012, 01:44:23 PM
On a separate note, Earnings out; http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1664751&highlight= (http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1664751&highlight=)
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 23, 2012, 05:02:06 PM
with oil trading near 110.. stocks like SD should be flying. Imagine how much hedging they can add on.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 23, 2012, 06:04:12 PM
Ya this is probably not the best horse to ride during this oil run up. Tom has really thrown Mr. Market for a loop, but I think he has made the right call by going offshore. Decent report, but  I want to hear about further monetizations. Also cant wait for the analyst day.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 23, 2012, 06:32:02 PM
I am waiting for the 3 billions - 500k Miss joint venture.

Funny both CHK and SD are 2 years away from breakeven
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on February 23, 2012, 09:01:20 PM
but I think he has made the right call by going offshore.

I sure hope so. At the time of acquisition Ward was expecting the Dynamic acquisition to add at least hundreds of millions to free cash flow (at least that's my recollection), so if high oil prices are sustained, this might end up being a really good call because I don't think the added production carries the hedges that SD has in place right now.
But I really hope that nothing is lurking around the corner that they haven't thought about that can come and throw a wrench in their plans because at the end of the day, good projections or not, the acquisition was both dilutive and added to the already high debt in the short term. If all goes to plan and oil prices stay high then the added cash flow might prove valuable in financing drilling, paying down debt and improving their ratios across the board. We'll see.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 23, 2012, 09:54:03 PM
I am starting to think it wasnt dilutive . The extra $100 million in cash ( I think thats sand bagged, and think either it will be higher or they will be growing production at DOR) has allowed them to keep an additional 250,000 miss acres. I would prefer a sale for cash (I own leaps and have a time limit lol), but just about everyone with Miss land is saying its one of the best plays in the US.

When they sell or JV 250,000 acres, we can take that value and see what buying DOR allowed them to keep. The upside in the held Miss land may offset the dilution. Ward also may already be planning bolt on / tuck in acquisitions or may already have some DOR property that he plans to sell off. I am looking forward to the analyst day, and check the news / RSS each day. One day we will have a PR announcing the closing of the trust, and the next JV / asset sell. The stock will go up on that day.

Also WTI is at $108, but Brent is north of $120. DOR sells closer to Brent. Any tuck in small >$100 million dollar acquisitions at 2x last years cash flow (when oil was lower) will be quite nice.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 24, 2012, 10:37:21 AM
Finally   the market appears to appreciate a quartely report  - it has been a while - not too much in the report not to like - onwards and upwards - drill and repeat for 2 years hedges in place - coild be very nice
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 24, 2012, 03:58:07 PM
Any owners who haven't listened to the latest CC should.

This will be a home run as long as oil stays around above 80$.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 28, 2012, 04:48:52 AM
Analyst day is today and the presentation is up.

http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-presentations

Slide 108 is interesting, NAV has moved significantly in 1 year. If we risk that by 50% we still get a nice number.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 28, 2012, 02:58:06 PM
If you listen to the webcast of today's presentation, in the Q & A Ward talks about the Pinion being for sale as it is no longer key to SD. Hopefully he doesn't rush to sell the field as once nat gas pricing improves the field could be quite valuable.  i wonder if he is in talks with Oxy as they would seem to be the logical buyers?

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 28, 2012, 07:30:28 PM
Yawn.. market is saying show me the money.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 28, 2012, 07:53:05 PM
Im 30 minutes into the 3 hours and its very good. I think the Market will be surprised we have maybe half a dozen catalysts coming

Sell of the Pinion
Additional Trusts
Sell of 250,000 Acres of Miss
DOR Surprises and Bolt Ons
Pushing out of debt at lower rates
Well cost savings due to water related experiments in the miss
and finally higher flow rates and around 25% more drilling locations in the miss due to experimentation on fracking and spacing

Tom has a good sense of humor, I liked the Nigeria joke lol.

NAV has almost doubled in a year. Thats worth something, SD should be at least 13 with all the changes. That will do wonders for my leaps. I closed out CHK and bought more SD.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on February 29, 2012, 03:44:40 AM
myth     just go to even on my jan 13 12.50 leaps after doubling down a few weeks ago and intended to move to 14's however premium is high and I think this has run in it so will ride them out a little longer  - did add some common but kept my CHK - their plan looks better than ever now  - now execute
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 29, 2012, 04:09:44 AM
My CHK 2014s were down about 30% about 2 weeks ago. I went all in on SD and wanted to sell CHK to buy even more SD. My SD 2014s that I just purchased are now up 33% and CHK is still sitting on the loss. I sold for SD because I understand the story much more. I like CHK but Aubrey inmo is creating a mess with his creative financing. The value is there, but the analyst are annoyed they are on CHK and have to work 3x as hard to understand the moving parts. The mezzanine financing and new entities only further complicate things.

SD should be a $13 stock and the analyst are coming around. My 2013s are up 6% after being down 40% for a good chunk of last year. I plan to sell the 2013s at $10 or so, and slowly unwind 2014s if we March higher. I will hold a core amount of 2014s in my taxable account. I am just bearish on gas, and its simple easier to play oil via SD. Ward has shown he can grow NAV (doubled vs. last year) and can bring that NAV forward operationally (unlike ATPG). The stock will catch up at some point, and hopefully NAV keeps moving forward.

CHK has the value and has the catalyst, but it will take time inmo. I think holding the 2013s is a good move. I had to hold my noise to buy the more expensive 2014s yesterday.
Title: Re: SD - SandRidge Energy
Post by: Sea Island on February 29, 2012, 06:20:00 AM
Myth, what is this b factor?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 29, 2012, 06:28:01 AM
Myth, what is this b factor?

Do you mean from the Analyst day page 41. Its a Geologist term, Im a trained Accountant so its all Greek to me. I know what they mean by type curve and that they use it to calculate the returns. I googled it and thought this might be useful. IMO this is what the independent Geologist are paid to verify / analysis.

http://www.hamiltongroup.org/documents/Decline%20Curves%20-%20Dr%20Stephen%20Poston.pdf
Title: Re: SD - SandRidge Energy
Post by: vinod1 on February 29, 2012, 06:45:12 AM
On slide #10, the implied acreage value is shown as $6.35 billion but the resource NAV is shown as $23 billion. I would think that the value for this acreage would be closer to the price at which it has been monetized i.e. $6.35. What am I missing? What is additional value to get to the resource NAV of $23 billion?

Thanks

Vinod
Title: Re: SD - SandRidge Energy
Post by: Sea Island on February 29, 2012, 06:51:30 AM
OK, thanks Myth. Is the value differential the acerage at the implied value of $15,000 per acre of resource value
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 29, 2012, 06:57:53 AM
Not sure what you are asking, but will give it a crack.

The acreage when drilled under the assumptions laid out has a value of $15,000. This is why Ward wants to hold it. The assumptions are probably a $95 oil price, the stated type curve, initaila production targets, and 3 acre spacing. There is upside if anything moves ups, and limited downside due to hedging. If sold a buyer will pay $4k for the acreage, put in the wells, and then reap the difference in the valuation.

Also here are my updated thoughts after hearing the entire call. I focus on catalysts.

   § Additional Trusts
   § Sell of the Pinion Field
   § Sell / JV of 250,000 Acres of Miss t around $4000 an acre or more.
   § Around 25% more Miss locations due to going from 3 acre spacing to 4.
   § Well cost savings due to water and other related experiments in the miss.
   § Higher flow rates in the Miss due to figuring out the secret / cracking the code.
   § DOR Surprises and Bolt Ons (Ward always has upside, he will let us know once it closes).
   § Pushing out of debt at lower rates - The $350 Million are callable at Par in April, They are at 9.875%.

The presentation also noted that NAV has almost doubled in a year. NAV is calculated using 3 Acre spacing vs. 4 in the Miss. They also priced oil at $98 rolling out to $91 and staying flat for the vast majority of the years. It appears to be a conservative calculation. We may have around 25% more drilling locations in the Miss if spacing is 4, and oil probably wont be $98 15 years out.
Title: Re: SD - SandRidge Energy
Post by: vinod1 on February 29, 2012, 04:12:13 PM
Not sure what you are asking, but will give it a crack.

The acreage when drilled under the assumptions laid out has a value of $15,000. This is why Ward wants to hold it. The assumptions are probably a $95 oil price, the stated type curve, initaila production targets, and 3 acre spacing. There is upside if anything moves ups, and limited downside due to hedging. If sold a buyer will pay $4k for the acreage, put in the wells, and then reap the difference in the valuation.

Also here are my updated thoughts after hearing the entire call. I focus on catalysts.

   § Additional Trusts
   § Sell of the Pinion Field
   § Sell / JV of 250,000 Acres of Miss t around $4000 an acre or more.
   § Around 25% more Miss locations due to going from 3 acre spacing to 4.
   § Well cost savings due to water and other related experiments in the miss.
   § Higher flow rates in the Miss due to figuring out the secret / cracking the code.
   § DOR Surprises and Bolt Ons (Ward always has upside, he will let us know once it closes).
   § Pushing out of debt at lower rates - The $350 Million are callable at Par in April, They are at 9.875%.

The presentation also noted that NAV has almost doubled in a year. NAV is calculated using 3 Acre spacing vs. 4 in the Miss. They also priced oil at $98 rolling out to $91 and staying flat for the vast majority of the years. It appears to be a conservative calculation. We may have around 25% more drilling locations in the Miss if spacing is 4, and oil probably wont be $98 15 years out.

Thanks. Now it makes sense. The market price for the acreage is $4k per acre (based on past historical transactions) but the mark to model price is $15k per acre. I assumed that they would be pretty close to each other.

Vinod
Title: Re: SD - SandRidge Energy
Post by: Myth465 on February 29, 2012, 04:32:03 PM
It wouldnt make sense if there wasnt upside for the buyer. They want a return on their investment. Ward is interesting, he bought this acreage for $200, and wants to retain it for the full NAV of $15,000. JV partners also I guess would be paying for the know how / secret sauce. From the presentation it doesnt look like all the other guys are getting the same returns, because they arent employing all of the same cost savings.

I am sure CHK will copy though, SD gets to look at the pilot program which features 4 acre spacing, I am sure they gave up some intel for that privilege.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 29, 2012, 06:17:11 PM
I think both CHK and SD will do very well if econ stays well. Both should at least double in 2 years if they don't get a buyout.

for SD, I don't think Ward is going to sell the that 200k anytime soon - he sounded like he want to develop it further before doing a JV or sale. (Maybe it's a negotiations tactics.)

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 01, 2012, 04:54:44 PM
I am thinking the selling is from DOR holders cashing in?
This soon will end.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 01, 2012, 06:02:23 PM
DOR hasnt closed. At least I dont think it has, also we have a lock up with the largest holder. They could be Arbing SD though to lock in their profits.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 01, 2012, 07:17:23 PM
it closes next Q but I don't see a reason that it won't so I think there is some profit taking and arb going on.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 02, 2012, 03:43:58 PM
and the beating continues - same thing happened to the Arena buyout.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on March 02, 2012, 04:50:04 PM
and the beating continues - same thing happened to the Arena buyout.

Same thing happened for most of the 2011 second half of the year. Best thing is to ignore it. Big worry is if you're carrying 2013 LEAPS.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 02, 2012, 05:29:25 PM
and the beating continues - same thing happened to the Arena buyout.

Same thing happened for most of the 2011 second half of the year. Best thing is to ignore it. Big worry is if you're carrying 2013 LEAPS.

I left with some 10s 15s - the 15s will like go worthless.
Title: Re: SD - SandRidge Energy
Post by: QLEAP on March 02, 2012, 08:01:07 PM

http://www.investorvillage.com/groups.asp?mb=16083&mn=21594&pt=msg&mid=11511239
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 20, 2012, 01:47:29 PM
SD performance has been a major disappointment. PPS seems getting locked with the
$8.02 buyout price.

Title: Re: SD - SandRidge Energy
Post by: gordoffh on March 20, 2012, 02:53:58 PM
SD performance has been a major disappointment. PPS seems getting locked with the
$8.02 buyout price.

You can say that again - one of my largest holdings and I like what ward has as a plan but the share price movement sure causes grief - made a fair bit on this last spring and will probably hold for the long term but every positive move followed by the inevitable downturn is tough - the story seems sound  -  a BAC. Type move would be welcome
Title: Re: SD - SandRidge Energy
Post by: tombgrt on March 20, 2012, 03:04:55 PM
http://www.smartmoney.com/invest/stocks/the-400-mans-new-big-bet-1332271348707/

Quote
Of SandRidge, Mecham likes its "enviable acreage holdings," a low-risk high-return drilling program, low and stable operating costs, and a screamingly cheap stock price." SandRidge stock hit $68 during the oil boom in 2008 -- compared to $8.42, or 37 times forecast earnings, now.


I should check out SD properly but fear that I'll find another great company for which I really have no money left.  :-X
Title: Re: SD - SandRidge Energy
Post by: Packer16 on March 21, 2012, 04:31:24 PM
I sold a modestly cheap holding for this 50 cent dollar that is growing due to Mississippian play potential and financial repression which will keep interest rates low.  I like the royalty trust as an exit vehicle and a way to realize value that I see few others using.

Packer
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 21, 2012, 05:11:57 PM
Judging by some of the postings on Yahoo which lead to the completion logs, Ward has found some upside in the drilling. The new IPs from some of the new wells are staggering. I am holding my oversized position and will unload some at $11, I may unload the 2013s around $9 towards the end of the year. The one negative is these new IPs could mean we JV / sale 0 acres. Ward will want to hold it all.

I also plan on buying the Preferreds for a tiny preferred allocation I plan on starting. They yield 4.5% and are just about in the money. We havent heard anything in a month, and the trust should be closing soon. Once the offshore purchase closes we should hear the real reasons as to why the purchase had to be made. I am guessing there is hidden upside / a plan to realize value.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 21, 2012, 06:51:38 PM
Not sure what the pps is waiting for here.  They can probably clear their LT debt if they choose to sell 500k acres + all remaining trust units.

For me, it's fairly straight forward to see value. Absent another Euro like shock, I think we will see double by Xmas after the numbers starting showing up..

Myth - why u think no JV given the new spacing?

Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 21, 2012, 06:56:24 PM
Not so much the spacing, that would be backed into any JV. Its probably going to be 4 and that will be confirmed after the CHK experiment. I think they wouldnt want to JV acreage if the intial production / flow rates move from around 300 to around 800. I dont know if people are just posting the best flow rates, or if SD has found the secret sauce.

If they can get flow rates to 500 bop consistently, then I doubt Ward would sell acreage for $4k.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 21, 2012, 06:58:32 PM
Not so much the spacing, that would be backed into any JV. Its probably going to be 4 and that will be confirmed after the CHK experiment. I think they wouldnt want to JV acreage if the intial production / flow rates move from around 300 to around 800. I dont know if people are just posting the best flow rates, or if SD has found the secret sauce.

If they can get flow rates to 500 bop consistently, then I doubt Ward would sell acreage for $4k.

ok... should they call off the trust then? hmmm.. actually I can't remember now, the pending trust is on Permian?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 21, 2012, 07:18:16 PM
Trust is Miss 2 and its a good way to raise capital. They are IPOing producing wells so this doesnt effect that. Also not sure if the IPs are moving up due to drilling changes or due to the region being drilled. Again it may be cherry picking of the best wells though.

I may buy the trust due to the fact that its a trap for retail investors that works quite well. They will allocate an extra rig to juice the dividend and will sell in 6 - 9 months once the trust has moved up 40% due to the high yield. If they have found a new secret sauce then they could juice the dividend without adding an extra rig due to the increased IPs.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 21, 2012, 07:23:18 PM
Thanks Myth.
I live in Canada so I don't think I can't get a hand on the trust.

If they are so confidence on the Miss, they should sell Permian and move all resources to Miss. No reasons to got for 70% IRR when u can get 90%.

Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 21, 2012, 07:44:19 PM
Thats not a bad idea, but you arent going to get PV10 for it or NAV. The other guy is going to want a 40% return. Permian is a nice little growth engine, and who knows what the upside will be with future technology. Its factory. You cant do much more there due to logistics. You also have EOR prospects with gas from the Century Plant. Permian might as well be held, its a cash cow. I would prefer trust after trust in the Permian area.

Ward is on to something, if he can hold as much as he can, avoid a take over, drill baby drill, and fix the balance sheet to get us towards the defined 2x EBITDA then the share price will take care of itself. Eventually SD will be taken over if they cant perform...

Its all quite exciting. We have 2 very strong legs, with a third leg pending. We may be able to acquire offshore assets at 2x EBITDA.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 22, 2012, 06:08:06 AM
Dynamic has some nice gas hedge for next couple years. The cash flow will be lower if those hedge are not in place.
Title: Re: SD - SandRidge Energy
Post by: Swizzled on March 23, 2012, 04:44:20 AM
In early April through Seeking Alpha I'm taking part in an interview with Tom Ward.  Apparently I get to submit five questions.  If anyone has specific questions that they would like me to ask, let me know:

http://valueinvestorcanada.blogspot.ca/2012/03/contribute-your-questions-for-interview.html
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 23, 2012, 05:07:15 AM
This team has been transparent, so none really good.

- With low risk of execution and willingness to hedge, why market gives 7 dollars pps while management keeps mentioning $60 NAV - where is the disconnect?
- Any risk of rising cost in the Miss play as the field become more well known?
- In the Investor Day call, it was mentioned that they can start harvest their water disposal infra-structures when the field get more mature? What's the timeline on that?
- Will Sandridge be doing any major acquisitions between it reaches its 2014 goal? Should we see SD as a E&P company with a focus in Miss and Central or investment fund that can go wherever cheap oil is?
- how come no insider buy at this level? Is it because of pending deals?
Title: Re: SD - SandRidge Energy
Post by: Packer16 on March 23, 2012, 06:14:18 AM
How do lower oil costs impact estimated NAV?  For example at $80 and $60 per barrel.  In my opinion, this is the highest risk so it would be useful to determine the impact of lower oil prices.  Thx.

Packer
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on March 23, 2012, 08:29:47 AM
Mr. Ward:

What generally unexpected corporate decision will you make next that could possibly throw shareholders for a loop?
Title: Re: SD - SandRidge Energy
Post by: mountboney on March 23, 2012, 09:18:20 AM
My question is really just a pet peeve.

By far the  number one issue with SD is the long term performance of the Mississippi Lime.  The market is obviously skeptical of SD's claim of 9000, 450 MBOE wells over the 2 mm acres, and rightfully so.   These kind of claims just create eye rolling. The geology is complex and heterogenous.  The natural fracturing is complex.  The structure is complex.  There are risks and ultimately much of the acreage will not be economic.  But it's not bad news and I'm not negative on SD, just realistic.  In fact the complicated geology is what created the opportunity in the first place.

So my question would be something like - "The market is clearly skeptical of the 9000 well scenario in the Mississippi.  Would SD not be better served if you provided more color on the risk and unknowns, along with the positive developments, in the Mississippi."

SD is well undervalued even if a fraction of the Mississippi acreage is economic.  Why create distrust by over-promoting?
Title: Re: SD - SandRidge Energy
Post by: gordoffh on March 23, 2012, 12:22:42 PM
Lots of chatter on yahoo board re takeover - up smartly today on volume - who knows ?   This stock is up and down like a toilet seat but one of these days to the moon Alice. For you older guys out there
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 23, 2012, 02:36:07 PM
I will take 20 bucks, please.
Title: Re: SD - SandRidge Energy
Post by: JAllen on March 30, 2012, 12:12:38 PM
This Range Resources presentation is interesting: http://www.rangeresources.com/rangeresources/files/aa/aaaf2a62-c9f9-4355-a6b5-73959e235d2a.pdf

They're showing 400-500EURs but are focusing a county or two east of SD because the oil percentage is higher there (~95% as opposed to half west of there), although SD seems to be focused on the whole thing.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on April 09, 2012, 05:44:27 AM
SandRidge Mississippian Trust II Launches Initial Public Offering

OKLAHOMA CITY, April 9, 2012 /PRNewswire/ -- SandRidge Mississippian Trust II (the Trust) announced today that it has commenced an initial public offering of 26,000,000 common units representing a 52% beneficial interest in the Trust, along with 3,900,000 additional common units that may be purchased at the option of the underwriters to cover over-allotments. The initial public offering is being made pursuant to a Registration Statement on Form S-1 and Form S-3 previously filed with the U.S. Securities and Exchange Commission. Following completion of the offering, SandRidge Energy, Inc. (NYSE: SD - News) (SandRidge), as sponsor of the Trust, will own approximately 11.3 million common units, assuming no exercise of the underwriters' option, and approximately 12.4 million subordinated units convertible into common units,  and the Trust will have a total of 49,725,000 units outstanding. The common units have been approved for listing on the New York Stock Exchange, and will trade under the symbol "SDR."
http://finance.yahoo.com/news/sandridge-mississippian-trust-ii-launches-105300905.html (http://finance.yahoo.com/news/sandridge-mississippian-trust-ii-launches-105300905.html)
Title: Re: SD - SandRidge Energy
Post by: gordoffh on April 09, 2012, 06:29:56 AM
Too bad the last 2 times they have come out when market or sector weakness. They probably will get the lower pricing with oil selling off
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 09, 2012, 07:37:16 AM
market for oil companies has been weak since beginning of the year. Looks at what SD has done in last few months and its share price doesn't really reflect those.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 09, 2012, 07:47:26 PM
Guys, what EV/EBITDA multiple will you assign for 2014 SD's 2 billions EBITDA?

Use 4 billions debt and 500million share counts - 4x - 8x will give 8$ to 24$ pps.

Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 09, 2012, 08:02:18 PM
I view SD as an asset play with assets worth $30 a share. They are converting those assets into cash flow, and also increasing the NAV value. As long as SD, trades below NAV and keeps growing NAV I am comfortable holding.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 09, 2012, 08:27:51 PM
I think well-hedged cash flow is a good supplement for NAV.

The 14 Leaps are getting cheap?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 09, 2012, 09:28:04 PM
I think well-hedged cash flow is a good supplement for NAV.

The 14 Leaps are getting cheap?

I agree on both accounts, that what makes SD worthwhile, unlike ATPG they are turning assets into cash flow. $2 billion is interesting, not because of a multiple, but mainly because they will be self funding at that point. Then transactions will be more about increasing NAV, and less about funding drilling.
Title: Re: SD - SandRidge Energy
Post by: Ross812 on April 10, 2012, 06:52:34 AM
Has anyone considered the convertible preferred shares? At 122 you are buying SD shares for 9.75 and pocketing (14.875/12.48) $1.19 in dividends per common share.

Sdrxp trades at a premium to the common and you will do better buying the common if SD starts firing on all cylinders in the next two years. The preferred seem like a good way to make 7% while you wait for SD to take off. When it does take off, it looks like the gain after conversion is going to be 20-30% less than if you would have bough the common. 20-30% would be hit by the 7% dividend in 3-4 years so you are betting the price would stay below 10.41 for the next few years.

Thoughts?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 10, 2012, 07:01:10 AM
Ya I have mentioned them in another thread, and tried to buy a chunck but failed to get a bit even when going up 2-3 dollars. I prefer the leaps, but the converts in FTP, CHK, SD, and a few other names, really make you pretty care free about price movements and timing of value realization.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 10, 2012, 07:49:37 AM
those pfds really make u care less about daily quotes. I try to sell more ATPGP, I can't see even what's the current bid.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 10, 2012, 01:40:18 PM
Down to 7, really an ouch for me. Again, I had high hope for this one.

Add some $10 14 leaps last few days.  :'(

http://online.wsj.com/article/SB10001424052702304072004577326284166231336.html
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on April 10, 2012, 01:54:08 PM
I am really debating doubling my position as it is really tempting at the current price. 

S
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 10, 2012, 02:09:30 PM
I would if I could. But I don't want to have too concentrated on oil and gas (although I believe O&G section is very cheap given the oil price)

Anyone read the prospectus for the new trust, only 53k acres allocated that and it values 1billions!
Anyone know how much SD used to developed that?

2013 funding gap is pretty much closed with the trust unit on the balance sheet.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 17, 2012, 07:59:44 PM
SandRidge Mississippian Trust II Announces Pricing of Initial Public Offering at The Top End of Price Range

http://finance.yahoo.com/news/sandridge-mississippian-trust-ii-announces-004500862.html

SandRidge Energy, Inc. Announces Closing of Acquisition of Dynamic Offshore Resources, LLC and Closing of $750 Million Offering of Senior Notes

Read more: http://www.digitaljournal.com/pr/668704#ixzz1sMCmj55q


Double icing on the cake
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 22, 2012, 04:28:09 PM
Thanks for the interview Devon.

http://www.foxbusiness.com/news/2012/04/20/chesapeake-co-founder-ward-also-took-loans-on-well-stakes/

Ward is just a smoother operator and SD is a much easier company to follow / understand. I want to see what happens in the Gulf, Ward always has upside. He has proven to be a great value investor.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on April 25, 2012, 05:45:33 PM
New presentation online. Shows Ward is one of the best value investors in the oil and gas patch. If he let SD crash and started a new company the returns would have been amazing.
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on May 02, 2012, 10:19:33 AM
Have your views on Tom Ward changed in any way after the hedge fund revelation? At least, he seems to be very open.

As Heritage racked up stellar returns of between 15 to 25 percent a year, McClendon and Ward decided to open the hedge fund to outside investors, including friends and associates, Cirino said. When Ward left Chesapeake in 2006, he retained his stake in the fund.

By 2007, Heritage was managing around $200 million, Cirino said. That enabled Ward and McClendon to profit in another way: by charging outside investors a management fee equal to 2 percent of assets and pocketing 20 percent of the fund's profits. It's a typical structure in the hedge fund industry, known as "2 and 20."

Cirino and Ward's recollections differ on at least one point. Ward said he didn't interact with the fund's outside investors. Cirino recalled that "every investor I was involved with either met with McClendon and Ward or at least spoke with them by phone before investing." The hedge fund's healthy gains were a lure, but "the cachet of those two individuals certainly also helped," Cirino said.

In addition to weekly Monday conference calls and regular emails, the two owners met frequently with traders in New York and occasionally in Oklahoma, Cirino said.

In 2007, as the price of natural resources surged on booming demand from China and other fast-developing countries, commodity traders with a successful track record were popular on Wall Street. After three years of double-digit returns, the fund's traders told McClendon and Ward they wanted an equity stake, Cirino said.

But the executives weren't ready to cede control, Cirino said, and the traders left to open their own shop, Perennial Capital LLC, a $200 million fund that has no financial ties to McClendon or Ward. Cirino said the departure was amicable.

At Heritage, all of the money from external investors was returned by 2008, Cirino said. McClendon and Ward continued to operate the fund during that year, Ward said, but by 2009, Heritage traded no more.

What happened next to McClendon's commodity-trading ventures is unclear.

By June 2008 - as natural gas and oil prices were peaking, and just before the financial crisis - McClendon and Ward both held huge positions in natural-gas derivatives, according to confidential trading data disclosed last year by U.S. Senator Bernie Sanders, an independent from Vermont.

The trading information was assembled as part of a CFTC inquiry into derivatives markets and their impact on real-world energy prices. McClendon and Ward were among only a handful of individual investors identified by the CFTC. Most of the other players were big corporations.

The data indicated McClendon and Ward were betting that the rally of 2008 would continue. By purchasing derivatives, they controlled nearly identical positions in natural gas worth around $2.3 billion apiece, according to Reuters calculations based on closing futures prices as of June 30, 2008. McClendon held oil contracts worth another $240 million, the CFTC data showed.
Title: Re: SD - SandRidge Energy
Post by: Grenville on May 02, 2012, 12:20:01 PM
Does anyone know if they've disclosed the hedge fund or trading in commodities for Ward in the Proxy or 10-K?

Title: Re: SD - SandRidge Energy
Post by: triedtestedand on May 02, 2012, 12:21:42 PM
A picture tells a thousand words ... I hadn't checked the natural gas storage report in several months, but what a set of #'s (and pictures):

http://ir.eia.gov/ngs/ngs.html
http://ir.eia.gov/ngs/ngs.gif
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 02, 2012, 03:47:25 PM
Unreal. looks like a 2pm margin call to me. Hope that's it.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 02, 2012, 04:25:22 PM
Unreal.  Conference call should be fun.

Yes indeed. I see this as a none issue.
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 02, 2012, 04:46:22 PM
That was crazy at the end of the day.  Seeing this makes me better understand why CEO's suck as much value as possible from shareholders.  What I am essentially saying is that why would a CEO give a crap about shareholders if they sell at the drop of a hat, if they demand steady earnings and growth every single quarter, and if you miss by a penny they sell.  Way too many want to trade for a quick 5-10% gain and then move on.  In most cases, shareholders are not partners, at all.  If the stock price hits a high or low number, as Cramer says, SELL SELL SELL.

Most companies are just ticker symbols and CEO's know it.  I saw the frustration on Tom Ward's face and heard them in his words on a recent conference call when responding to analysts.  Don't get me wrong,   I think he  is guilty of excessive personal compensation from SD and excessive personal financial risk (leverage).  On the other hand he has created a significant amount of value in SD but I would rather see him participate via regular old common share appreciation (does he really need to be selling all the time to make ends meet?) over the long term like me, versus making millions and millions of dollars today, pocketing it now, and if his plan doesn't come to fruition, still walk away with millions and millions. 

I wish there were more Prem's and FFH/WEB and BRK, etc., and I wish more CEO's followed their lead.  I wonder if FFH is going to start a FRPP (Founders Risk Participation Program) where Prem invests directly in insurance policies underwritten by Odyssey, Crum, Northbridge, FFH Asia, etc.  where Prem pays his portion of the expenses to write the policies and in return Prem get's his portion of the underwritting profit/loss PLUS his portion of investment gains/losses on portfolio.  That scenario almost sounds dumb unless the CEO doesn't really see himself as a shareholder?  Just buy the common shares.  Sorry for rambling....

<Edit : I retract my comment where I said Ward was always selling.  There was the 2008 and 2010 incidents but since then, it looks like all or most selling was just to settle his tax liability when he received his annual restricted stock grants that vested. Looks like he is sitting tight with his 24-25M shares>
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 02, 2012, 05:19:43 PM
FFHWatcher we all know with FFH's underwriting that program wouldnt be worth investing in....  :)

Now a Founders Co Portfolio Investment Scheme, that's a whole other story.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on May 02, 2012, 06:07:57 PM
So what exactly did this story do to the assets SD is sitting on?
The move was just crazy.

At last week's value investing conference organized by the Ivey school right before the Fairfax meeting I got to ask Ward a question.
I basically asked him what he thought about the main criticism thrown at him, namely that his heart as a guy who knows how to recognize value won't allow him to pass on super cheap assets  (the Dynamic acquisition being the latest one) even though he still has a lot of work to do on his balance sheet.
He basically said what we all know by now, that acquiring assets was one thing but that SD had to get creative in funding the drilling because of the gap between their cash flows and the capex needed to exploit those assets, hence the JVs, asset sales, trusts etc...
However he also told us that in his mind SD was now positioned to harvest the benefits of what they've been planting and he told his employees as much, I think he used the same term he uses in his latest presentation "positioned for years of harvest".
He also mentioned that he believed his critics would begin to be proven wrong this year as the drilling ramps up according to plan and metrics start improving across the board.

In summary, I think I will open my wallet and buy more; I'm thinking 2014 LEAPS.
Title: Re: SD - SandRidge Energy
Post by: CONeal on May 02, 2012, 06:17:42 PM
Did Tom Ward happen to address anything in the press during the dinner last week?
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 03, 2012, 04:05:26 AM
FFHWatcher we all know with FFH's underwriting that program wouldnt be worth investing in....  :)

Now a Founders Co Portfolio Investment Scheme, that's a whole other story.

I almost wrote that but I added PLUS just to be clear.  Technically Prem has invested along side FFH but anyone can do that as they are public companies (SD). 

Question, What if Prem were to invest alongside FFH into their non-public companies? That would be similar to the FWPP, wouldn't it?  What if Hamblin Watsa employees set up it's own investment account, funded it with their personal capital, did a good job and then recruited outside investors and charged a fee?  Wait, didn't they used to do that?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 03, 2012, 05:51:04 AM
I was just thinking, for argument sake - WB and PW bought shares their companies also bought - is that a conflict? Why they spend out looking out for their own investments outside the companies'?

Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 03, 2012, 06:40:45 AM
From 2009 SD Proxy...

During 2008, Mr. Ward was invoiced $40,631,771 for his share of costs for his interests in Program Wells, and received oil and gas revenues from his interests in Program Wells totaling $15,701,363.
 
On October 9, 2008, we entered into a purchase and sale agreement with Mr. Ward and certain of his affiliated entities to acquire all of Mr. Ward’s interests under the WPP. We paid approximately $67.3 million in cash for the interests, and in connection with the transaction, Mr. Ward and the Company agreed to terminate the WPP in its entirety. The purchase of Mr. Ward’s interests under the WPP was made effective as of September 30, 2008. The terms of the purchase and sale agreement were reviewed and approved by the disinterested members of our Board of Directors, and we believe the purchase of Mr. Ward’s interests was on terms not materially less favorable than those that might reasonably have been obtained in a comparable arm’s length transaction with an unaffiliated third party and are fair to us from a financial point of view.
Title: Re: SD - SandRidge Energy
Post by: twacowfca on May 03, 2012, 09:30:54 AM
From 2009 SD Proxy...

During 2008, Mr. Ward was invoiced $40,631,771 for his share of costs for his interests in Program Wells, and received oil and gas revenues from his interests in Program Wells totaling $15,701,363.
 
On October 9, 2008, we entered into a purchase and sale agreement with Mr. Ward and certain of his affiliated entities to acquire all of Mr. Ward’s interests under the WPP. We paid approximately $67.3 million in cash for the interests, and in connection with the transaction, Mr. Ward and the Company agreed to terminate the WPP in its entirety. The purchase of Mr. Ward’s interests under the WPP was made effective as of September 30, 2008. The terms of the purchase and sale agreement were reviewed and approved by the disinterested members of our Board of Directors, and we believe the purchase of Mr. Ward’s interests was on terms not materially less favorable than those that might reasonably have been obtained in a comparable arm’s length transaction with an unaffiliated third party and are fair to us from a financial point of view.


Let me see if I understand this.  About the time management determined to exit natural gas E&P because they thought it likely that  natural gas prices would tank because of the looming production glut, they buy back the Chairman's interest in that production. 

Well that's one way to reward him for seeing the future clearly.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 03, 2012, 04:37:26 PM
Q is out and it's not bad at all.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 03, 2012, 05:12:05 PM
Earnings out.

http://www.sec.gov/Archives/edgar/data/1349436/000119312512208476/d342295dex991.htm

Key take aways for me. More acreage, increased production. Not sure about the cost, but if Ward can buy for $200 - $400 and sale for $4k then we have a winner. SD is the preferred driller and will probably get the highest IRR, and will be the preferred JV due to how they deal with water and keep cost down.

Regarding the hedge fund. I dont like it, Ward has always been Aubrey light, and appears to simply just overpay himself now. It looks like all the other side activities have been curtailed or stopped. He is always a much better investor than Aubrey.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 03, 2012, 05:20:51 PM
How would you explain the sharp increase in April production in Miss?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 03, 2012, 08:20:13 PM
It looks like production moved up by 2000. Not sure about why, could be the way the completions were done. Maybe some were drilled in March, but hooked up in April. Another idea could be better IP rates in April. Maybe some really high rate wells came on-line at the end of April.

They spent $70 million on 200,000 acres, and still have $70 million. They may be buying acreage at around $350 and planning on selling it for $4.4k. Very interesting. We could have 400,000 more acres for 2012, and then give up 250,000 for $1.1 billion.....

I think very little of that $145 budget will be spent on seismic. Most will go towards acreage.
Title: Re: SD - SandRidge Energy
Post by: biaggio on May 04, 2012, 06:04:13 AM
From 2009 SD Proxy...

During 2008, Mr. Ward was invoiced $40,631,771 for his share of costs for his interests in Program Wells, and received oil and gas revenues from his interests in Program Wells totaling $15,701,363.
 
On October 9, 2008, we entered into a purchase and sale agreement with Mr. Ward and certain of his affiliated entities to acquire all of Mr. Ward’s interests under the WPP. We paid approximately $67.3 million in cash for the interests, and in connection with the transaction, Mr. Ward and the Company agreed to terminate the WPP in its entirety. The purchase of Mr. Ward’s interests under the WPP was made effective as of September 30, 2008. The terms of the purchase and sale agreement were reviewed and approved by the disinterested members of our Board of Directors, and we believe the purchase of Mr. Ward’s interests was on terms not materially less favorable than those that might reasonably have been obtained in a comparable arm’s length transaction with an unaffiliated third party and are fair to us from a financial point of view.


Let me see if I understand this.  About the time management determined to exit natural gas E&P because they thought it likely that  natural gas prices would tank because of the looming production glut, they buy back the Chairman's interest in that production. 

Well that's one way to reward him for seeing the future clearly.

I know Mr Ward is well respected on this board and by FFH.

Why would he do that? Crazy to do it only for the money. He was trained by the guy at CHK, no?

I would not even wasting your time with "the Q" no matter how good it is. How can you trust him with your hard earned money (or more importantly your clients money)
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 04, 2012, 09:24:33 AM
Some one asked the same question in the CC.
To Ward's points, someone think he paid too much or too little... it's whether the BoD and shareholders want him to go or not. He said he create billions of value to shareholders.

I agree with his points above although waiting for the value to reflect on pps has not been fun.

Re: the jump in April - Looks like they got couple wells with 2k oil (yes 2000)... but doesn't mean it's all over the acres. :) the IRR is amazing on those, pay back period is 10 days.

Another questions I found interesting were:

1) Someone ask why they can keep buying the acres cheap while selling it so high. It's about scale and those water disposal systems again.
2) Someone ask what happen if NG storage is full. I feel Ward doesn't want to answer it as he wants distance the company from NG. 80% revenue coming from oil.

Same play book as CHK, just smaller scale and couple years further.


Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 07, 2012, 12:18:31 AM
Earnings out.

http://www.sec.gov/Archives/edgar/data/1349436/000119312512208476/d342295dex991.htm

Key take aways for me. More acreage, increased production. Not sure about the cost, but if Ward can buy for $200 - $400 and sale for $4k then we have a winner. SD is the preferred driller and will probably get the highest IRR, and will be the preferred JV due to how they deal with water and keep cost down.

Regarding the hedge fund. I dont like it, Ward has always been Aubrey light, and appears to simply just overpay himself now. It looks like all the other side activities have been curtailed or stopped. He is always a much better investor than Aubrey.

There is almost certainly lots of side activities.  That is just my opinion based on the character of the executives in the O&G industry and on Wards, McClendon's past. The side activities aren't necessarily with McClendon. They aren't regular investors or risk takers.  They found/create companies and then lever the crap out of their holdings to buy more and more and more, historically at the top.  They create (is anybody suggesting BOD created Founders Well Programs?) incentives for themselves in their compensation that are stunning for most, only outdone by investment bankers.  I will say that Ward made a good point in saying that he created Billions of value in just the Mississipian play alone, why doesn't he deserve 10's of millions?  Just because the share price hasn't moved up?  Hard to blame him for that. 

Myth: why do you say that Ward is a better investor than McClendon?  Just because Aubrey was able to get a margin call on shares of a company he founded 20 years earlier?  Ward did it on a company he founded but not quite to the magnitude of Aubrey.  We can only assume that Ward left with hundreds of millions from his shares in CHK yet all his SD shares are held as collateral for loans. Where is his equity?  As far as the fund goes, they should have received equal returns :-)

Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 07, 2012, 03:19:42 AM
Ward is a value investor. His personal finances are his thing, but he is a better Investor as a Manager, because he covers the risks. Look at what he does, listen to what he says, look at how he designed the company, and look who he hangs out with (Prem Watsa). Ward / Aubrey were 1 in the same with Ward being a better operator and less of a risk taker. Aubrey was the marketing / promotions guy and is a much better speaker. I would say they were more similar then alike.

But look at Ward post 2008. He put money into a natural gas company, then scored a big win when prices hit $13. Then slightly break even at $8 gas. Him and his team saw that gas would continue to go down due to shale. They had to lever the company up to switch to oil, but the alternative would have been a take under or bankruptcy due to low gas prices.

Post 2008 I would say they are very different because Ward has learned from his mistakes. I see no downside to SD except for oil going to $40 and staying there for 5+ years. Ward picked assets which were dirt cheap, had no exploration risk, cheap wells to drill, high IRRs. He saw the problem (water), and spent time figuring out how to deal with it. Even now with the homeruns they are still focused on getting well costs as low as possible which creates a moat. Anyone can buy acreage, but the IRRs comes from bringing cost down. Who would you JV with, someone with 200,000 acres but no experience in the Miss or SD. The one risk over the next 5 years that I can see is oil prices dropping, and Ward is hedging out production for 5 years. He has taken a beating on those hedges, but he is eliminating the one main short term risk he faces. Looks smart with Europe popping up again.

Look at Dynamic, its a platform to acquire the cheapest oil in the world. The Permian was the cheapest oil in the world, then the miss acreage was dirt cheap, and now offshore assets are going for 2x CF. Ward goes where the value is, and inmo is a value investor. Aubrey's strategy appears to be to pray for a hot summer / cold winter, and now the markets (stock, debt, and natural gas) are forcing his hand. He just seems to be behind the curve to a degree, instead of ahead of it. Reacting instead of acting. I love the assets at CHK ,but its just a mess trying to get your hands around all of the JVs, forward asset sales, trusts, and aceage. Too may moving parts, and a Management that isnt focused inmo.
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 07, 2012, 06:10:50 AM
Myth, I agree that Ward is a great investor with SD corp. assets.  I asked the question because you made the comment within the paragraph that related to his personal hedge fund so I thought you were referring to his pesonal investment performance. 

Personally, I wish he stayed in Oklahoma to run SD.  His promotional gigs obviously aren't successfully spreading the word, same goes for Chad at FTP.  My suggestion... Go sit at your desk and create real value.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 07, 2012, 06:37:10 AM
I have mixed feelings. The promos have really helped me understand the story, but you are right the market isnt responding. SD just needs to sell 400,000 acres for 1.8 billion cash and carry. The stock price would respond if that happened. Not hard when you have 200k in extra that showed up cheaply. Until then we are a slave to WTI. Selling 200k to 400k along with another billion dollar Miss trust, and 500 million permian trust would be nice though. A few small bolt ons in the Gulf at 2x cash flow wouldnt be bad either...
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 07, 2012, 04:56:01 PM
Mr. market currently has no love to commodities stocks.  It's his job to promote the company either way. The value is now self-creating daily thru drill bits.
I regret that I bought some LEAPs once again.
Title: Re: SD - SandRidge Energy
Post by: DCG on May 07, 2012, 05:46:00 PM
Mr. market currently has no love to commodities stocks.  It's his job to promote the company either way.

No it's not. It's his job to run and grow the company, and to not care about short-term movements of the stock.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 07, 2012, 06:10:35 PM
Mr. market currently has no love to commodities stocks.  It's his job to promote the company either way.

No it's not. It's his job to run and grow the company, and to not care about short-term movements of the stock.

I don't think its either or. He can run and grow the company as well as promoting it.
Title: Re: SD - SandRidge Energy
Post by: DCG on May 08, 2012, 05:22:09 AM
Mr. market currently has no love to commodities stocks.  It's his job to promote the company either way.

No it's not. It's his job to run and grow the company, and to not care about short-term movements of the stock.

I don't think its either or. He can run and grow the company as well as promoting it.

Right, but my point is promoting the company and promoting the stock are two different things. He's nowhere near as bad as Mclendon though.. Who does the rounds of talk shows saying CHK stock should double.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on May 13, 2012, 08:58:24 AM
I have mixed feelings. The promos have really helped me understand the story, but you are right the market isnt responding. SD just needs to sell 400,000 acres for 1.8 billion cash and carry. The stock price would respond if that happened. Not hard when you have 200k in extra that showed up cheaply. Until then we are a slave to WTI. Selling 200k to 400k along with another billion dollar Miss trust, and 500 million permian trust would be nice though. A few small bolt ons in the Gulf at 2x cash flow wouldnt be bad either...

I don't know Myth.
I agree to a certain extent with you about asset sales and Ward has said that a net sale of about 250K acres could be in the works, but if you think about it, doing all that selling you describe would get the stock moving but is it in the best interest in the long run?

It sure looks great to sell assets for $4,600/acre that he bought for $215/acre, but hanging on to those assets and exploiting them rather than monetizing them would give SD a value of $14,000/acre. To me this has always been a story about having the foresight to acquire great assets at really dirt cheap prices and then having to get creative in finding the cash to exploit them.
If you think about it, even the Dynamic acquisition was done to get their hands on immediate cash flows on the cheap which means that much less assets they have to sell in their main plays on the continent.

I think we sometimes are our own biggest enemy as we tend to play in the options world and the problem with options every now and then something happens like a scandal about the CEO or something and someone calls time on us before our game is over.
But I do think SD's story is developing as expected and it will continue to do so.
 
Title: Re: SD - SandRidge Energy
Post by: Packer16 on May 13, 2012, 09:42:22 AM
It looks like CHK has 2.0 million acers for sale in the Mississippi.  It will be interesting to see if SD can either get a good deal or can structure a win-win deal with CHK.

Packer
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 13, 2012, 04:37:48 PM
I have till 2014 on the bulk of my options. I havent done a calculation, but I remember on a call a few quarters ago a discussion between Ward and an analyst. The PV really drops off after 10 years or so. Ward wants less then 10 years of inventory, and probably has closer to 15 right now. You want to pull that forward to avoid having most of it discounted away.

The only way to do that is to sell some of it. He doesnt want to sell the Permian which makes sense.  Its like a factory, and no one will drill it better than them. You run the 10 rigs or so there for the next 10 years, and get 80% IRRs. You can do a few trusts along the way and that area of the company is basically self funding.

In this Miss we just so happened to pick up an extra 200k for maybe $400 an acre. He could today sell that for $4k to $6k, generating a 10k return in a matter of months. He could probably sell acreage in the old Miss for more due to  it being proved out. Instead of getting a 10x return and basically eliminating the funding gap till 2014, you want him to hobble along for another few years dependant on the markets. You also risk a take under because the shares wont rise without the gap being closed, and with that crippled balance sheet.

Sometimes you got to give a little to get alot. I would prefer no funding gap, and a large JV partner for another 200k-400k (we would still have 800k - 1 million to ourselves, we got 200k just out of the blue). Then finally a billion dollar trust in the Permian and Miss each year (selling 50% of each would net SD $1 billion in cash, $1 billion in shares). This cash should be used to reduce debt, and acquire offshore assets.

Who losses here? We lose out on some of the NAV from $4k / $6k to $14k on those acres, but after you discount that 10 - 15 years do we really loss? NAV per acre is probably closer to $20k after taking into account oil price risings and 4 acre spacing, but still its being discounted over 15 years because these would be the last wells drilled.

Those are my thoughts, let me know what you think.
Title: Re: SD - SandRidge Energy
Post by: king888 on May 14, 2012, 09:49:28 AM
I have just finished reading 34 pages on this thread. It's clear that why SD is one of favorite stock in the board.
I have some questions that I still do not understand because I am very new to O&G industry.

How many of production out of SD has been hedged ? I read in the investor presentation. SD has 80% of Oil production hedged in 2012 but only 13% of NG is hedged (swap&collar) in 2012 . Is this correct ?
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on May 14, 2012, 10:27:17 AM
I can't put my finger on the exact number but I believe that SD isn't planning on selling much NG into the markets until the prices improve, therefore, not much of a reason to hedge production (as there isn't any...or at least not very much).
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on May 15, 2012, 11:06:45 AM
I just significantly added to my position earlier today, I cannot believe how this stock is selling at this price!!! Anyone else added? 
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on May 15, 2012, 02:08:23 PM
Why the big drop today? SD is fairly well hedged so I am not sure why the drop in oil would cause such a large drop...

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: gordoffh on May 15, 2012, 02:26:59 PM
I have a large position in this stock and thought we were through with this volatility with the positive last quarter. They are meeting all targets and wells are producing better than expected. It will take time for the drill bit to offset the debt but barring a complete collapse of oil they should do extremely well. The hedges will take them tnrough a fairly long period. I am adding as the stock drops to average down a bit even though I have enough. Been a tough couple of weeks when added to my position in MFC but will hold. Never thought stock would approach the 5's again but such is the market. Bought some may calls just before the quarter for a flip in case of positive news. Well I won,t be doing that again.
Title: Re: SD - SandRidge Energy
Post by: enoch01 on May 15, 2012, 03:25:50 PM
Why the big drop today? SD is fairly well hedged so I am not sure why the drop in oil would cause such a large drop...

cheers
Zorro

I think it's because I started a position halfway through the day.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 15, 2012, 05:55:03 PM
Sucks, this might have to do with CHK.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 15, 2012, 06:26:05 PM
SD has always been a slave to WTI. This happened last year, and I wanted to buy more. Then it moved up 22% on the announcement of a Miss JV. I predict similar results this time around.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 15, 2012, 06:46:58 PM
90$ oil is like ~75% IRR. And next couple years is well hedged. Even 60$ won't kill this company, that's still a respectable 30 IRR.

But they probably could have picked up Dynamic cheaper now.
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on May 15, 2012, 07:15:28 PM
Re: SD - SandRidge Energyk=topic=3427.msg76918#msg76918 date=1336952268]
I have till 2014 on the bulk of my options. I havent done a calculation, but I remember on a call a few quarters ago a discussion between Ward and an analyst. The PV really drops off after 10 years or so. Ward wants less then 10 years of inventory, and probably has closer to 15 right now. You want to pull that forward to avoid having most of it discounted away.

The only way to do that is to sell some of it. He doesnt want to sell the Permian which makes sense.  Its like a factory, and no one will drill it better than them. You run the 10 rigs or so there for the next 10 years, and get 80% IRRs. You can do a few trusts along the way and that area of the company is basically self funding.

In this Miss we just so happened to pick up an extra 200k for maybe $400 an acre. He could today sell that for $4k to $6k, generating a 10k return in a matter of months. He could probably sell acreage in the old Miss for more due to  it being proved out. Instead of getting a 10x return and basically eliminating the funding gap till 2014, you want him to hobble along for another few years dependant on the markets. You also risk a take under because the shares wont rise without the gap being closed, and with that crippled balance sheet.

Sometimes you got to give a little to get alot. I would prefer no funding gap, and a large JV partner for another 200k-400k (we would still have 800k - 1 million to ourselves, we got 200k just out of the blue). Then finally a billion dollar trust in the Permian and Miss each year (selling 50% of each would net SD $1 billion in cash, $1 billion in shares). This cash should be used to reduce debt, and acquire offshore assets.

Who losses here? We lose out on some of the NAV from $4k / $6k to $14k on those acres, but after you discount that 10 - 15 years do we really loss? NAV per acre is probably closer to $20k after taking into account oil price risings and 4 acre spacing, but still its being discounted over 15 years because these would be the last wells drilled.

Those are my thoughts, let me know what you think.
[/quote]

I think you're right.
I almost forgot why I personally asked Ward about his answer to all his critics who say that fixing SD's balance sheet is not a priority for him. I asked him because it's priority for me  :)
I agree with you, if SD shareholders could chose, I think we would all chose to close the funding gap so that we don't take on any additional debt and then work on solidifying the balance sheet.
All in all your position makes more sense than mine I think.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on May 15, 2012, 07:36:59 PM
Thanks AZ. Hopefully we both come through with long term gains.

Ward has always been a few steps ahead of me, and much more creative. He will sort things out.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on May 17, 2012, 08:48:53 PM
Does anyone know if Prem still owns Sandridge in his personal account? What is his percentage ownership in the company?
Title: Re: SD - SandRidge Energy
Post by: gordoffh on May 22, 2012, 01:23:54 PM
I don,t know about the rest of you SD holders but I have to admit I am getting whiplash the way this stock goes up and down. Can only assume the big machines are playing this. Have been for the most part buy and hold but certainly could have day traded this if was so inclined. Keep drilling and bringing those wells on line and at some point you would assume value would be recognized.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on May 22, 2012, 02:05:58 PM
I don,t know about the rest of you SD holders but I have to admit I am getting whiplash the way this stock goes up and down. Can only assume the big machines are playing this. Have been for the most part buy and hold but certainly could have day traded this if was so inclined. Keep drilling and bringing those wells on line and at some point you would assume value would be recognized.


LEAPS
Title: Re: SD - SandRidge Energy
Post by: KFRCanuk on May 23, 2012, 09:15:46 AM
This is getting crazy cheap now $6!

UG.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on May 23, 2012, 10:59:33 AM
We have falling oil prices, Europe being....europe, and Patriot coal rumours of chapter 11. This might get even cheaper.  I am waiting for FFH and Prem to start buying, for value guys they seemed to call the top on this one pretty well.

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on July 24, 2012, 06:42:11 PM
Almost 30k per acres? This can't be right. Anyone know NBL's acres' location??



http://www.sacbee.com/2012/07/24/4654467/noble-energy-agrees-to-sell-permian.html


HOUSTON, July 24, 2012 -- /PRNewswire/ -- Noble Energy, Inc. (NYSE: NBL) today announced that it has signed a definitive agreement to sell certain oil and natural gas properties in the Permian Basin to Sheridan Holding Company II, LLC, a privately held Houston based oil and gas company, for $320 million.  The transaction has an effective date of April 1, 2012 and is expected to close in August 2012, subject to customary closing conditions and adjustments.

The properties include Noble Energy's interest in about 250 producing wells on approximately 11,000 net acres.  As of the effective date, net daily production was over 1,500 barrels of oil equivalent per day consisting of more than 90 percent crude oil and natural gas liquids.       

David L. Stover, Noble Energy's President and COO, commented, "The sale of our Permian assets is a continuation of our previously announced divestiture plan.  Sales of our non-core assets allow us to focus on the developments within our core areas.  Our teams have worked diligently and we are pleased with the pace of divestitures and value received."

Tudor, Pickering, Holt & Co. advised Noble Energy on the transaction.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.

Read more here: http://www.sacbee.com/2012/07/24/4654467/noble-energy-agrees-to-sell-permian.html#storylink=cpy
Title: Re: SD - SandRidge Energy
Post by: AZ_Value on July 24, 2012, 08:04:21 PM
Almost 30k per acres? This can't be right. Anyone know NBL's acres' location??



http://www.sacbee.com/2012/07/24/4654467/noble-energy-agrees-to-sell-permian.html


HOUSTON, July 24, 2012 -- /PRNewswire/ -- Noble Energy, Inc. (NYSE: NBL) today announced that it has signed a definitive agreement to sell certain oil and natural gas properties in the Permian Basin to Sheridan Holding Company II, LLC, a privately held Houston based oil and gas company, for $320 million.  The transaction has an effective date of April 1, 2012 and is expected to close in August 2012, subject to customary closing conditions and adjustments.

The properties include Noble Energy's interest in about 250 producing wells on approximately 11,000 net acres.  As of the effective date, net daily production was over 1,500 barrels of oil equivalent per day consisting of more than 90 percent crude oil and natural gas liquids.       

David L. Stover, Noble Energy's President and COO, commented, "The sale of our Permian assets is a continuation of our previously announced divestiture plan.  Sales of our non-core assets allow us to focus on the developments within our core areas.  Our teams have worked diligently and we are pleased with the pace of divestitures and value received."

Tudor, Pickering, Holt & Co. advised Noble Energy on the transaction.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.

Read more here: http://www.sacbee.com/2012/07/24/4654467/noble-energy-agrees-to-sell-permian.html#storylink=cpy

Holy @$#%!!
$30K per acre? This can't be right...
What are we missing? The press release definitely says 11,000 acres for $320 million

http://investors.nobleenergyinc.com/releasedetail.cfm?ReleaseID=694563 (http://investors.nobleenergyinc.com/releasedetail.cfm?ReleaseID=694563)



Title: Re: SD - SandRidge Energy
Post by: alertmeipp on July 24, 2012, 08:07:55 PM
apparently, the range has been 1.6k to 17k, but 300k is very high so I was wondering if their acres are close to SD or CHK. And the production # is mini-muscle compared to CHK or SD.

ODD.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on August 02, 2012, 04:34:59 PM
This Quarter results look very good indeed. Ward appears to be following plan and the oil seems to be there. This has been frustrating the past while but hard to see this stock not moving higher with continued  results such as this. The conference call tomorrow should be interesting.

http://finance.yahoo.com/news/sandridge-energy-inc-reports-financial-200500313.html
Title: Re: SD - SandRidge Energy
Post by: Kiltacular on August 03, 2012, 12:44:59 PM
gordo (or anyone else),

Any knowledge of why the market has responded today as it has?
Title: Re: SD - SandRidge Energy
Post by: gordoffh on August 03, 2012, 01:01:37 PM
They don,t like ward? DOR purchase,not selling additional acreage ,too much debt  -  he does change things up a little but man I don,t see too much not to like with this quarter - stock is heavily shorted and perhaps subject to some shenanigans . I have more than enough but still bought more with the opening sell off. Had it for awhile and despite the the stock price disappointment so far I still am in for the long haul. For the past year the company and the oil play they are in show promise to me anyway and it is a play on gas as well.
Title: Re: SD - SandRidge Energy
Post by: Kiltacular on August 03, 2012, 01:28:30 PM
Quote
They don,t like ward? DOR purchase,not selling additional acreage ,too much debt  -  he does change things up a little but man I don,t see too much not to like with this quarter - stock is heavily shorted and perhaps subject to some shenanigans . I have more than enough but still bought more with the opening sell off. Had it for awhile and despite the the stock price disappointment so far I still am in for the long haul. For the past year the company and the oil play they are in show promise to me anyway and it is a play on gas as well.

Thanks gordo.  It seems like the shorts really went after this at the same time the CHK issue arose though I haven't followed closely.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 03, 2012, 07:14:35 PM
Some investors want more conservative balance sheet these days and something more predictable.

The 2012 cap exp is now at 2.1b and another funding gap to fill..

This will remind ppl that SD is little CHK although we all know SD has way more oil. Any way, LEAPS.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 05, 2012, 06:52:03 AM
Another solid quarter, another disappointing stock price reaction.

Ward is leading and Mr Market is doing his job. Analyst are freaked out by moves in Capex and his reluctance to sell acreage. I see his perspective, they are exceeding drilling results, dont want to do more trusts (I predict 1 more) because it complicates the story / balance sheet, dont want to sell the original miss for a few different reasons, and dont want to sell the new miss without the data / it being proved up. If the data is too good (such as several 2k wells) they still wont want to sell it for $5k-$8k an acre.

Oil prices are up and will trend higher, rig release days down, drilling cost down, drilling technique improving, and spacing will move to 4 vs 3 providing 20%+ more locations. Why sell the acreage if we can fund it with debt and be under 3x EBITDA is what Ward is thinking. Why not move up capex if drilling is going well and we have to frontload more infrastructure to hold all the acreage.

Mr. Market wants a man who will stick to a plan, and wants debt to be reduced. The plan seems pretty solid to me and I think the SP should be higher. I want to buy more, but will likely role over my leaps to 2015 when they come out. This will have to go up at that point, but prior its anyones guess.

I personally would like to see a sell of the WTO or more importantly the Permian. Pricing for Permian acreage is solid and its all proved up. Why not sell it for 60% - 75% value, buy some more Gulf (how can you not like buying oil at 1.1 cash flow) and stick to the Miss and Gulf with the WTO in your back pocket for a gas recovery. At least do one more Permian trust to fully fund 2013 and part of 2014.

Either way Ward knows what he is doing and I like the moves he is making. We have several catalyst (CHK has assets in both our main areas for sell, Devon is moving big into the Miss, oil prices, ect). I plan to sit back and just enjoy the show.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on August 05, 2012, 08:37:33 AM
Another solid quarter, another disappointing stock price reaction.

Ward is leading and Mr Market is doing his job. Analyst are freaked out by moves in Capex and his reluctance to sell acreage. I see his perspective, they are exceeding drilling results, dont want to do more trusts (I predict 1 more) because it complicates the story / balance sheet, dont want to sell the original miss for a few different reasons, and dont want to sell the new miss without the data / it being proved up. If the data is too good (such as several 2k wells) they still wont want to sell it for $5k-$8k an acre.

Oil prices are up and will trend higher, rig release days down, drilling cost down, drilling technique improving, and spacing will move to 4 vs 3 providing 20%+ more locations. Why sell the acreage if we can fund it with debt and be under 3x EBITDA is what Ward is thinking. Why not move up capex if drilling is going well and we have to frontload more infrastructure to hold all the acreage.

Mr. Market wants a man who will stick to a plan, and wants debt to be reduced. The plan seems pretty solid to me and I think the SP should be higher. I want to buy more, but will likely role over my leaps to 2015 when they come out. This will have to go up at that point, but prior its anyones guess.

I personally would like to see a sell of the WTO or more importantly the Permian. Pricing for Permian acreage is solid and its all proved up. Why not sell it for 60% - 75% value, buy some more Gulf (how can you not like buying oil at 1.1 cash flow) and stick to the Miss and Gulf with the WTO in your back pocket for a gas recovery. At least do one more Permian trust to fully fund 2013 and part of 2014.

Either way Ward knows what he is doing and I like the moves he is making. We have several catalyst (CHK has assets in both our main areas for sell, Devon is moving big into the Miss, oil prices, ect). I plan to sit back and just enjoy the show.

Why go with the LEAPS? You are losing time value on it.
Title: Re: SD - SandRidge Energy
Post by: twacowfca on August 07, 2012, 12:31:49 PM
Myth, please comment on today's big $800M + 7.50% coupon debt sale.  What are the economics, compared to setting up another trust?

Thank you.
Title: Re: SD - SandRidge Energy
Post by: QLEAP on August 07, 2012, 08:01:01 PM
I am not Myth but I think the trust has couple of disadvantages

1) You need a lot of proved reserves for the trust and its hard to do that on a big scale. Besides, the money raised will be much lower than wait a couple of years, drill and prove. SD values the Miss at 15k per acre (currently going at 4k per acre) and if they are able to raise even half of that, its a big hit

2) It makes the financials more murkier with the NCI and hedges. There are already a lot of moving parts here that it makes things more complicated.

Having said that, my guess is that SD is probably looking at another trust at a smaller scale (500 million). More likely that part of the notes raised will be used for GoM assets.

Tom is always looking 3 yrs away and is not scared to leverage the balance sheet while I think the analysts really want a few asset sales in 3-6 months to deleverage.

I am still trying to figure out where the risks are when you hedge 81% of your oil production generating 100% returns when you raise debt at 7.5%. Rising NG prices is a nice call option here.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 08, 2012, 03:05:41 AM
They are similar, but debt is better in terms of economics. Sentient is a whole other issue.

The cost of 10 year debt of $1.1 billion is 7.5%. The public would demand something similar via trust, but would also get the upside of monster wells, improved drilling cost savings, 4 acre spacing, and rising oil prices. SD would also take a proved reserve and production hit as the trust was setup. It would also be another entity to account for, track, and explain.

I would say in terms of economics Ward has it right.

Debt - gives you full $15k PV per acre and can be funded under 10% and handled under stated EBITDA goals.
Trusts - can be brought to market at less than 10% and help put a value on the remaining acreage. Helps delever the company.
JV - Gives you the least PV value, but is easier to deal with from an accounting perspective. Also helps delever the company.

I think the offer went well and am very pleased with the stock reaction (we didnt tank massively). I think the offer was originally for $500 million and was mainly a roll over deal. It was up-sized due to interest and up-sized again (my opinion). I like it because we shouldn't have to raise debt anytime soon, and have pushed out maturities. This should please analyst. I dont like it because it leaves Ward with quite a bit of cash on hand. He will do whats best for the company over 3 years, but it will likely hurt the share price if he does anything more than drill wells. I would like to see them call the 2016s at around 10% if possible.

Buying Gulf properties at 1.1 cash flow is a cant lose deal inmo. DOR was a fair price, the only way to get value from that deal is to continue buying assets at less than 2x CF to offset the fair price paid. Ward likes what he sees in the miss and may have the top tree US producing wells in the last 3 years. I think he is doing the right thing. Also CHK is selling quite a few assets, best to wait and let them set a floor.

The only exception is I would sell the Permian. Its oily, fully proved up, and the returns seem to be dropping each quarter. Ward is a value investor and wants to bottom feed in the oil patch. Why not give up some upside and sell something you got cheap now that everyone wants oil. I would love a sell of the Permian, massive stepped up drilling in the Miss, and several Gulf acquisitions. Thats just me though.

I think QLEAP is right, we may see one more trust, though Ward has really de-emphasized trusts and the JV.
Title: Re: SD - SandRidge Energy
Post by: Packer16 on August 24, 2012, 03:51:11 PM
I was looking at this security and it has a nice current yield 8.0% and upside with conversion into about 12.5 shares/preferred share.  You have a value investor running SD and FFH has a large stake.  I own the common but the preferred provides a nice yield while you wait (similar to some of Buffet's investments). 

Another interesting feature is as SD's plan plays out the coverage and leverage ratios will change this from a B credit to a BB or higher credit, so the bond floor will rise (the YTM will fall) in addition to the conversion feature increasing in value.

Has anyone looked at these securities?  TIA.

Packer
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on August 24, 2012, 04:17:35 PM
I was looking at this security and it has a nice current yield 8.0% and upside with conversion into about 12.5 shares/preferred share.  You have a value investor running SD and FFH has a large stake.  I own the common but the preferred provides a nice yield while you wait (similar to some of Buffet's investments).  Has anyone looked at these securities?  TIA.

Packer

Very interesting. Who was the one looking for a long/short?

SandRidge Energy, 8.50% Convertible Perpetual Preferred Stock, liquidation preference $100 per share, not redeemable at the issuer's option at any time, and with no stated maturity. Cumulative distributions of 8.50% ($8.50) per annum paid in cash or common stock are paid quarterly on 2/15 & 8/15 to holders of record on the record date fixed by the board (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Dividends paid by the preferred are eligible prior to 1/1/2011 for the 15% tax rate on dividends under normal holding restrictions and are also eligible for the dividends received deduction for corporate holders. The preferred shares are convertible any time at the holder's option into 12.4805 common shares of SandRidge Energy Inc. (NYSE: SD), an initial conversion price of $8.0125 per common share. On or after 2/20/2014, if the price of the common stock exceeds 130% of the conversion price for 20 of any 30 consecutive trading days, the company may, at their option, cause the preferred shares to be converted into common shares at the then prevailing conversion price. In regard to the payment of dividends and upon liquidation, the preferred shares rank equally with other preferreds and senior to the common shares of the company.


Prospectus http://www.sec.gov/Archives/edgar/data/1349436/000095013409000802/h65499exv3w1.htm
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on August 24, 2012, 08:11:15 PM
More details and formulas in the prospectus

The Conversion Price shall be subject to the following adjustments (except as provided in Section 7(e)):

(i) If the Company pays a dividend (or other distribution) in shares ...

(ii) If the Company issues to all holders of shares of the Common Stock rights, options or warrants...

(iii) If the Company subdivides, combines or reclassifies the shares of Common Stock into a greater or lesser number of shares of Common Stock...

(iv) If the Company makes a distribution consisting exclusively of cash to all holders of the Common Stock, excluding ...

(v) If the Company or any of its subsidiaries successfully completes a tender or exchange offer for the Common Stock that involves the payment of consideration with a value per share of Common Stock exceeding the average Closing Sale Price ...

(vi) If the Company distributes to all holders of shares of Common Stock evidences of indebtedness, shares of capital stock (other than Common Stock) or other assets....

(vii) Notwithstanding anything herein to the contrary, no adjustment under this Section 7(d) need be made to the Conversion Price unless such adjustment would require an increase or decrease of at least 1% of the Conversion Price then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, if any, which, together with any adjustment or adjustments so carried forward, shall amount to an increase or decrease of at least 1% of such Conversion Price; provided, however, that with respect to adjustments to be made to the Conversion Price in connection with cash dividends paid by the Company, the Company shall make such adjustments, regardless of whether such aggregate adjustments amount to 1% or more of the Conversion Price, no later than February 15 of each calendar year.

(viii) The Company reserves the right to make such reductions in the Conversion Price in addition to those required in the foregoing provisions as it considers advisable in order that any event treated for Federal income tax purposes as a dividend of stock or stock rights will not be taxable to the recipients. ....
Title: Re: SD - SandRidge Energy
Post by: Myth465 on August 27, 2012, 02:04:25 AM
I think Prem was on to something with SD preferred and am planning to allocate a good chunk of capital to them once my cash flow is sorted. SD will double or triple at some point but you get paid 8% while you wait. Ward is focused on the long term and make good decisions for SD but the payoff will be a few years off. Much better value here then common or options inmo.
Title: Re: SD - SandRidge Energy
Post by: bargainman on August 27, 2012, 06:05:05 PM
I think Prem was on to something with SD preferred and am planning to allocate a good chunk of capital to them once my cash flow is sorted. SD will double or triple at some point but you get paid 8% while you wait. Ward is focused on the long term and make good decisions for SD but the payoff will be a few years off. Much better value here then common or options inmo.

What is the trading symbol for this?
Title: Re: SD - SandRidge Energy
Post by: stahleyp on August 27, 2012, 06:53:31 PM
I think Prem was on to something with SD preferred and am planning to allocate a good chunk of capital to them once my cash flow is sorted. SD will double or triple at some point but you get paid 8% while you wait. Ward is focused on the long term and make good decisions for SD but the payoff will be a few years off. Much better value here then common or options inmo.

What is the trading symbol for this?

The 8.5%'s ticker is SDRXP. Cusip is 80007P406
Title: Re: SD - SandRidge Energy
Post by: muscleman on September 02, 2012, 01:43:43 PM
I think Prem was on to something with SD preferred and am planning to allocate a good chunk of capital to them once my cash flow is sorted. SD will double or triple at some point but you get paid 8% while you wait. Ward is focused on the long term and make good decisions for SD but the payoff will be a few years off. Much better value here then common or options inmo.

I just started looking into SD today, after I got burned with the ATPG story. :-[
This one seems to be delivery solid production growth results, unlike ATPG, which kept saying turnaround is about to happen, but never happened.
I also like the fact that Prem bought a lot of it.
However I am a bit concerned whether the CEO's compensation is so high. That seems troubling.
Also I am curious how much funding gap there is to realize their 3 year plan. They said funding is already in place for 2012 and 2013, so how about 2014?
Title: Re: SD - SandRidge Energy
Post by: gordoffh on September 05, 2012, 08:29:51 AM
Latest presentation reveals a lot to like about the mid continent play - perhaps tom ward is correct and it is time to harvest - for us longs it has been a volatile ride - even market is reacting positively

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTUxNjUxfENoaWxkSUQ9LTF8VHlwZT0z&t=1
Title: Re: SD - SandRidge Energy
Post by: muscleman on September 05, 2012, 10:41:54 AM
Latest presentation reveals a lot to like about the mid continent play - perhaps tom ward is correct and it is time to harvest - for us longs it has been a volatile ride - even market is reacting positively

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTUxNjUxfENoaWxkSUQ9LTF8VHlwZT0z&t=1


They added just a little more from the August 23rd slides. I don't see any material new info. Could you tell me why you think this is showing Missisipian play is really promising?
Title: Re: SD - SandRidge Energy
Post by: gordoffh on September 05, 2012, 02:34:42 PM
They added just a little more from the August 23rd slides. I don't see any material new info. Could you tell me why you think this is showing Missisipian play is really promising?

My bad. I hadn,t looked at an actual presentation since probably june so i wasn,t really making a comparison to the aug 23. I was making a general statement on the play and was impressed with this presentation. It seemed a little slicker than earlier ones . The progress they are making and howvthey are going to get there is laid out nicely. I suppose i could ask what you see that would reveal the play as being less than presented.
Title: Re: SD - SandRidge Energy
Post by: muscleman on September 05, 2012, 05:02:34 PM
They added just a little more from the August 23rd slides. I don't see any material new info. Could you tell me why you think this is showing Missisipian play is really promising?

My bad. I hadn,t looked at an actual presentation since probably june so i wasn,t really making a comparison to the aug 23. I was making a general statement on the play and was impressed with this presentation. It seemed a little slicker than earlier ones . The progress they are making and howvthey are going to get there is laid out nicely. I suppose i could ask what you see that would reveal the play as being less than presented.

Oh yeah. If you say the overall plan sounds good, I agree.
I was burned by ATPG, but SD seems quite different as they are delivering solid production growth inline with their guidance.
However I am still unsure how to value this company. I have some shares but didn't buy heavily because I am not sure how to assign a proper value. A PV-10 of 8 Billion, with current enterprise value of 7 Billion isn't that cheap. Any thoughts?
Title: Re: SD - SandRidge Energy
Post by: Packer16 on September 05, 2012, 05:21:34 PM
The real question is how much is the Mississippian worth?  Right now it's implied worth is less than the value of the land deals and the royalty trust.  Alot of the Mississippian acreage is in the extension with unproven amounts of oil.  See the portion of the presentation where the extension has a much lower well success rate and lower oil flow rate.  I think it is a good deal if the extension has the lower amount of oil per the presentation (2x) but is a home run if the extension has at the level of the core Mississippian (10x).

Packer
Title: Re: SD - SandRidge Energy
Post by: muscleman on September 06, 2012, 10:10:16 AM
The real question is how much is the Mississippian worth?  Right now it's implied worth is less than the value of the land deals and the royalty trust.  Alot of the Mississippian acreage is in the extension with unproven amounts of oil.  See the portion of the presentation where the extension has a much lower well success rate and lower oil flow rate.  I think it is a good deal if the extension has the lower amount of oil per the presentation (2x) but is a home run if the extension has at the level of the core Mississippian (10x).

Packer


Are you referring to the "Kansas Mississippian: More of the Same" part for the core part? In the most recent presentation? (Link is a few posts above)
They drilled 69 wells and 46 of them are producing.

For the extension part,
"Extending the Horizontal Mississippian"

In that slide they drilled 14 wells of which only 6 are producing. Yes it is lower.

Their current proved reserves is like 550 MMboe. I think that along justifies the enterprise value. The key is whether their claim of 4400 MMBOE potential can be realized.


Title: Re: SD - SandRidge Energy
Post by: gordoffh on September 06, 2012, 02:04:49 PM
In that slide they drilled 14 wells of which only 6 are producing. Yes it is lower.

Now I didn,t take this that the other 8 wells were failures but just not totally complete to allow full production. Is this possible or are they actually saying they were dry wells. The fact that one well was 98% oil is positive if it were to continue.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on November 08, 2012, 05:23:01 AM
Quote
TPG-Axon Sends Letter to SandRidge Energy’s Board of Directors
- Calls For Board Of Directors Realignment, CEO Resignation And Potential Sale of the Company
- Estimates Fair Value of SandRidge at $12 - $14 Per Share
NEW YORK--(BUSINESS WIRE)--

TPG-Axon, owners of more than 4.5% of the outstanding shares of SandRidge Energy, Inc. (SD), sent a letter today to SandRidge’s Board of Directors.

In the letter, TPG-Axon outlines the following:
• SandRidge stock has been a disastrous performer. It has been the single worst performing energy stock in the US market, and in the bottom 1% of the broader market, since its IPO in 2007. SandRidge stock has declined 76% since its 2007 IPO, and over 91% from its peak in 2008.
• The market has lost confidence in management, which is reflected in the greatest discount to current Net Asset Value of any US energy company.
• The dramatic decline in the stock, and massive discount to Net Asset Value, has been caused by three factors: • Management strategy has been incoherent, unpredictable, and volatile, amplifying uncertainty regarding the future course of the company;
• Poor strategic planning and reckless spending have resulted in repeated ‘financial emergencies’, and caused massive dilution, soaring cost of capital, and unnecessary risks for shareholders; and,
• Corporate governance has been appalling, which has drained massive value from shareholders and completely misaligned management and shareholder interests.
• Despite management missteps, SandRidge shares offer extraordinary value. On a standalone basis, fair value for SandRidge stock is $12 to 14, with significantly greater upside possible through a strategic sale or sensible development of assets in coming years.
• As a result, in order to unlock the value of the company in the best interests of shareholders, TPG-Axon calls for: • The Board of Directors must be significantly reconfigured, with certain directors replaced by credible, independent directors, chosen after extensive consultation with large shareholders. In addition, large shareholders should be invited to join the board, if they so desire.
• The Board must then reconfigure management and leadership of the company. TPG-Axon believes CEO Tom Ward’s credibility is too damaged to continue in his role. The company must bring in new management that is viewed as credible, experienced, and highly competent.
• The Board should hire an advisor to explore all strategic alternatives. Given the difficult challenge of restoring confidence, the Board must also consider whether the value of the company’s assets will instead be maximized through a sale to another company.
• TPG-Axon hopes management will work constructively with shareholders to achieve change, but their relentless focus will be on ensuring that necessary steps are taken to build and maximize shareholder value
The full text of the letter can be found attached.
Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50470829&lang=en
 
http://finance.yahoo.com/news/tpg-axon-sends-letter-sandridge-123000109.html
Does any one know who TPG-Axon are?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 08, 2012, 05:53:20 AM
the full letter has more info. (attached)
Title: Re: SD - SandRidge Energy
Post by: Sportgamma on November 08, 2012, 07:43:27 AM
From the letter:

Quote
The Board has sanctioned compensation levels for Tom Ward that are unconscionable in light of company performance. For example, total compensation for 2011 was over $25 million - representing a full 1/2 of the company’s earnings. In fact, CEO compensation has been between $15 and $26 million in every year since the company’s IPO. This is simply astonishing, considering 1) the stock has declined 76% over this period, 2) the relative stock performance has been in the bottom 1% of all major US listed stocks, and dead last among energy companies, and 3) Book Value per Share has declined by over 60% over this period. In fact, when compensation is adjusted for market capitalization of the company, the figures become even more appalling – relative to market capitalization, Tom Ward has been the single highest compensated CEO among all energy companies, and among the highest compensated CEOs in America…despite destroying more shareholder value than 99% of other companies and CEOs.
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on November 08, 2012, 09:25:31 AM
THE RESPONSE!

http://finance.yahoo.com/news/sandridge-energy-inc-responds-shareholder-171000452.html

Quote
While our perspectives on various points made in the letter from TPG-Axon differ in many instances, we agree that SandRidge has valuable assets and that we need to focus on improving performance for shareholders. 
Title: Re: SD - SandRidge Energy
Post by: Parsad on November 08, 2012, 09:35:11 AM
THE RESPONSE!

http://finance.yahoo.com/news/sandridge-energy-inc-responds-shareholder-171000452.html

Quote
While our perspectives on various points made in the letter from TPG-Axon differ in many instances, we agree that SandRidge has valuable assets and that we need to focus on improving performance for shareholders. 

I thought that was a very, very weak response!  TPG has some merit in their argument.  Not removing Tom, since Sandridge is Tom Ward, but the compensation structure there and at Chesapeake is what has kept me from owning any of either company. 

I don't know...you see CEO compensation like Buffett and Watsa, or even Patrick Byrne, and then even to a degree like Brian Moynihan where he takes less and it's tied to his performance...and then the numbers relative to the size of company ARE shocking at Sandridge.  I'm also not a fan of such huge related party transactions...just a no-no in my mind...separation of state and church you know...you're CEO so there is a certain level of protocol and restraint in the size and scope of related party transactions.  Cheers! 
Title: Re: SD - SandRidge Energy
Post by: Parsad on November 08, 2012, 09:41:15 AM
Incidentally, TPG did all that number crunching but did they even check to see what it would cost shareholders to terminate Tom Ward...about $100M!  They would have been better off working for change in the compensation structure with Tom and the board, than filing a 13-D.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Poor Charlie on November 08, 2012, 12:10:47 PM
Where all that SD shareholder money is going :  :'(
 
Jet        :  http://www.duncanaviation.aero/debrief/archive/201010/21-fleet.php

SD HQs : http://www.youtube.com/watch?v=Pk90HnY_FiM
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 08, 2012, 12:22:58 PM
Incidentally, TPG did all that number crunching but did they even check to see what it would cost shareholders to terminate Tom Ward...about $100M!  They would have been better off working for change in the compensation structure with Tom and the board, than filing a 13-D.  Cheers!

you don't post much on SD, but looks like u have done some work!
Title: Re: SD - SandRidge Energy
Post by: Parsad on November 08, 2012, 12:46:50 PM
Incidentally, TPG did all that number crunching but did they even check to see what it would cost shareholders to terminate Tom Ward...about $100M!  They would have been better off working for change in the compensation structure with Tom and the board, than filing a 13-D.  Cheers!

you don't post much on SD, but looks like u have done some work!

I don't post much on it.  I've been following it since Fairfax started investing in it, but I can't make heads or tails of it.  Even after reading all the various posts, articles, etc, as well as the 10-Q's and 10-K's, it just seems like a very complicated way to make money.  Then you include the issues around compensation, related party transactions, debt, etc and it's a 10-foot hurdle.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: rijk on November 08, 2012, 12:54:09 PM
Where all that SD shareholder money is going :  :'(
 
Jet        :  http://www.duncanaviation.aero/debrief/archive/201010/21-fleet.php

SD HQs : http://www.youtube.com/watch?v=Pk90HnY_FiM

wow, great research, as an investor, this is all you need to know about sandridge

regards
rijk
Title: Re: SD - SandRidge Energy
Post by: Poor Charlie on November 08, 2012, 01:40:00 PM
Rijk
I don’t know what you were expecting in terms of “research” I posted more for your amusement (note the emoji). 

But all kidding aside we’re not talking about some O&G trust/partnership where the assets will be slowly liquidated and cash flows paid out to shareholders.   SDs value is highly dependent on the capital allocation skills of management, as they will almost certainly reallocate the entire market cap (in capex) over just a few years.  I ask you: do you think your capital is being wisely spent on lavish comp and fancy offices/planes? 

Given a choice for a partner I would much rather hitch my wagon to Contango where costs are minimized and capital allocated wisely. 
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 08, 2012, 02:27:28 PM
TPG is right on valuation and on comp. SD is undervalued so I will wait and see. I like the report and the thoughts on selling the Permian, its something I had hoped for 2 quarters ago.

Management has been key to the turn around, but comp is far too high. I like the outside pressure though, it will push Ward to close the gap to get everyone off his back. Prem's SD investment has shown why he is where he is, for the last 2-3 years he has gotten his 7.5% and will see a double once that valuation gap is closed. He is getting paid to wait.....

More to come after a detailed review of the filling.
Title: Re: SD - SandRidge Energy
Post by: newbee on November 08, 2012, 03:40:57 PM
Sandridge posts 3rd quarter results
http://finance.yahoo.com/news/sandridge-energy-inc-reports-financial-210500244.html (http://finance.yahoo.com/news/sandridge-energy-inc-reports-financial-210500244.html)
Seems to be a decent quarter.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 08, 2012, 05:54:33 PM
Sandridge posts 3rd quarter results
http://finance.yahoo.com/news/sandridge-energy-inc-reports-financial-210500244.html (http://finance.yahoo.com/news/sandridge-energy-inc-reports-financial-210500244.html)
Seems to be a decent quarter.

They are going to sell Permian Basin. Interesting.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 09, 2012, 05:45:21 AM
I agree with just about every word of that letter. Very interesting to see how this plays out, and the call should be interesting as well. Ward has gotten the message and I believe this has pushed him to sell the Permian.

The asset value is there, but Ward is overly focused on long term value and perhaps empire building, not shareholders. With his comp he gets paid to wait, but take over has always been a risk. I think the trusts and structure have protected SD though.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on November 09, 2012, 06:52:47 AM
The stock is down just under 12% today and selling for $5.41.  This is a unbelivable price!!! Debating if I should add SD or continue to add BAC warrents!!!
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on November 09, 2012, 07:50:27 AM
The stock is down just under 12% today and selling for $5.41.  This is a unbelivable price!!! Debating if I should add SD or continue to add BAC warrents!!!

Fortress Paper
ATP Oil and Gas
SandRidge

Be careful.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 09, 2012, 01:29:24 PM
Missed part of the call, but obviously, ppl are pissed that TW now considering selling its stable cash cow + the previous advertised 2015 goal might no longer achievable.

A disappointment for sure.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 09, 2012, 03:55:01 PM
Much deeper then that. Selling the Permian is good, the issue from what I have heard is the drop in EUR and ROR. ROR is now at 55% right around the same point as the Permian. Great ROR but not the 90% plus we have been hearing about. That clips IV, but makes the DOR purchase look less bad because they gave up a little less than thought. A drop in ROR clips upside for sure. Tough because the Miss looked real with alot of independants and majors moving in. Its still good, but not as good.

We are looking at dead money while this takeover business is worked out, due to the dropped oil EUR and ROR. I knew something was up when I noticed that all prior presentations were removed. Will be interesting to see the next PPS. You win some, you lose some, and hopefully you learn something....


More to come after a detailed listen to the call.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 09, 2012, 05:30:26 PM
I think 50% ROR with 80$ oil is not new, right?

those 80-90 ROR is only if 90-100 oil.

More gas and less oil is the downer.

Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 09, 2012, 07:48:32 PM
It would be new, the hedges protect from the fall in oil. The more gas and less oil is the reason why ROR has dropped. We will know for sure with the next presentation but the fact that all the prior ones are down doesnt bode well....
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 09, 2012, 08:35:22 PM
It would be new, the hedges protect from the fall in oil. The more gas and less oil is the reason why ROR has dropped. We will know for sure with the next presentation but the fact that all the prior ones are down doesnt bode well....

Miss was 77% IRR with July strip, Permian was 56%.


was 45% oil now 40% but there is hope the scale will help boost the ROR.

So, at 5.5 Miss play
6.8 EV - 2.4 (assume Permian sale) - 1.2 DOR - 0.8 trust units = 2.4 billions for 1.8millions acres = 1.33k per acre.

Previous transactions done by SD average about 4.5k per acre. Wait and see.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 10, 2012, 12:59:32 AM
What was July strip. You may be right, I need to have a detailed listen to the call and more importantly review the next presidentation. My understanding was ROR was around 90% with $100 oil and $3 gas. I am not too worried about $80 oil due to hedges and increases in oil demand overtime. The next presentation is fairly soon, but a 20% drop is pretty severe. That meeting next week will be very interesting to say the least.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 11, 2012, 10:17:42 AM
I am much less enthused with the idea of selling the Permian than some. On page 24 of the February 28 2012 Investor Day presentation SD shows the total NPV of this asset as $7.2 billion. There is very little probability of it being sold for this much in any outright asset sale, but it does show the potential long-term value there,. Then there is the issue of the increasingly gassy production from the Mississipian play - do we want to put all of the SD eggs in the one play? (GOM assets are not major at this point). Further the potential sale seems a rather knee-jerk reaction to the TPG letter instead of a well thought out plan. The plan outlined in February, including the rationale for the DOR acquisition, actually made a great deal of sense.

I have what I feel is a better idea, one which allows SD to raise cash while retaining control of the Permian. In order to maximize the value of both the Permian and Mississipian assets, while improving the balance sheet and providing funds for the 2013/2014 cap-ex plan, I think SD should create two MLP's. Create an MLP for each play and we get top price from retail investors, we can keep a significant portion of each play, plus pick up fees for operating the MLPs. SD received better pricing for the royalty trusts than it did for the JVs. Just put all of the remaining acerage of each play into the two MLPs, sell off a bit of each...the market will like this better than TWs current plan if the market reaction on Friday is any indicator. To me it makes more sense.....thoughts?

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 11, 2012, 10:30:06 AM
I am much less enthused with the idea of selling the Permian than some. On page 24 of the February 28 2012 Investor Day presentation SD shows the total NPV of this asset as $7.2 billion. There is very little probability of it being sold for this much in any outright asset sale, but it does show the potential long-term value there,. Then there is the issue of the increasingly gassy production from the Mississipian play - do we want to put all of the SD eggs in the one play? (GOM assets are not major at this point). Further the potential sale seems a rather knee-jerk reaction to the TPG letter instead of a well thought out plan. The plan outlined in February, including the rationale for the DOR acquisition, actually made a great deal of sense.

I have what I feel is a better idea, one which allows SD to raise cash while retaining control of the Permian. In order to maximize the value of both the Permian and Mississipian assets, while improving the balance sheet and providing funds for the 2013/2014 cap-ex plan, I think SD should create two MLP's. Create an MLP for each play and we get top price from retail investors, we can keep a significant portion of each play, plus pick up fees for operating the MLPs. SD received better pricing for the royalty trusts than it did for the JVs. Just put all of the remaining acerage of each play into the two MLPs, sell off a bit of each...the market will like this better than TWs current plan if the market reaction on Friday is any indicator. To me it makes more sense.....thoughts?

cheers
Zorro

how does MLP differ from Trusts that they did?
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 11, 2012, 11:47:26 AM
I am much less enthused with the idea of selling the Permian than some. On page 24 of the February 28 2012 Investor Day presentation SD shows the total NPV of this asset as $7.2 billion. There is very little probability of it being sold for this much in any outright asset sale, but it does show the potential long-term value there,. Then there is the issue of the increasingly gassy production from the Mississipian play - do we want to put all of the SD eggs in the one play? (GOM assets are not major at this point). Further the potential sale seems a rather knee-jerk reaction to the TPG letter instead of a well thought out plan. The plan outlined in February, including the rationale for the DOR acquisition, actually made a great deal of sense.

I have what I feel is a better idea, one which allows SD to raise cash while retaining control of the Permian. In order to maximize the value of both the Permian and Mississipian assets, while improving the balance sheet and providing funds for the 2013/2014 cap-ex plan, I think SD should create two MLP's. Create an MLP for each play and we get top price from retail investors, we can keep a significant portion of each play, plus pick up fees for operating the MLPs. SD received better pricing for the royalty trusts than it did for the JVs. Just put all of the remaining acerage of each play into the two MLPs, sell off a bit of each...the market will like this better than TWs current plan if the market reaction on Friday is any indicator. To me it makes more sense.....thoughts?

cheers
Zorro

how does MLP differ from Trusts that they did?

It is my understanding - and i could be wrong - is that a royalty trust has an interest in the production from a particular asset or set of assets and typically has a finite life, while the MLP can buy new assets and has no finite life. I am sure others can better explain it than i can but those are two key diferences.

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on November 11, 2012, 04:27:07 PM
Thanks for putting that in perspective as I have been burned on ATP Oil and Gas...

S

The stock is down just under 12% today and selling for $5.41.  This is a unbelivable price!!! Debating if I should add SD or continue to add BAC warrents!!!

Fortress Paper
ATP Oil and Gas
SandRidge

Be careful.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 11, 2012, 08:34:58 PM
I am much less enthused with the idea of selling the Permian than some. On page 24 of the February 28 2012 Investor Day presentation SD shows the total NPV of this asset as $7.2 billion. There is very little probability of it being sold for this much in any outright asset sale, but it does show the potential long-term value there,. Then there is the issue of the increasingly gassy production from the Mississipian play - do we want to put all of the SD eggs in the one play? (GOM assets are not major at this point). Further the potential sale seems a rather knee-jerk reaction to the TPG letter instead of a well thought out plan. The plan outlined in February, including the rationale for the DOR acquisition, actually made a great deal of sense.

I have what I feel is a better idea, one which allows SD to raise cash while retaining control of the Permian. In order to maximize the value of both the Permian and Mississipian assets, while improving the balance sheet and providing funds for the 2013/2014 cap-ex plan, I think SD should create two MLP's. Create an MLP for each play and we get top price from retail investors, we can keep a significant portion of each play, plus pick up fees for operating the MLPs. SD received better pricing for the royalty trusts than it did for the JVs. Just put all of the remaining acerage of each play into the two MLPs, sell off a bit of each...the market will like this better than TWs current plan if the market reaction on Friday is any indicator. To me it makes more sense.....thoughts?

cheers
Zorro

how does MLP differ from Trusts that they did?

It is my understanding - and i could be wrong - is that a royalty trust has an interest in the production from a particular asset or set of assets and typically has a finite life, while the MLP can buy new assets and has no finite life. I am sure others can better explain it than i can but those are two key diferences.

cheers
Zorro


Thanks. The market probably just hated the uncertainty because TW changes courses so often.
Miss gets better ROR than Permian so it makes sense to focus on Miss... and show the growth.

But the fact that Miss is showing more gas makes ppl wonder.
Title: Re: SD - SandRidge Energy
Post by: rijk on November 13, 2012, 03:10:38 AM
this article indicates that selling the permian will only bring short term debt/liquidity relief but that post 2014 debt/liquidity will continue to be an issue due to lower oil composition combined with ongoing miss capital requirement exceeding cash flow....

how solid/real are the $12-14/share intrinsic value estimates?

http://amp2012.com/2012/11/12/sandridge-energy-update-reduce/


regards
rijk
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on November 13, 2012, 11:37:16 PM
http://www.bloomberg.com/video/sandridge-management-is-not-trusted-singh-says-xacJJMnnSBCEylg2oXcMbA.html (http://www.bloomberg.com/video/sandridge-management-is-not-trusted-singh-says-xacJJMnnSBCEylg2oXcMbA.html)

Dinakar Singh, CEO of TPG-Axon Capital Management LP, on Bloomberg

12 min video
Title: Re: SD - SandRidge Energy
Post by: txlaw on November 15, 2012, 11:42:02 AM
Interesting.

http://www.bizjournals.com/prnewswire/press_releases/2012/11/15/NE13858

Mount Kellett is the same firm who went activist on CLWR a couple of weeks ago.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 15, 2012, 01:52:04 PM
Exciting stuff. Now is likely the time to buy but I have all I need...
I always said Ward would get it right or risk a take over. Its weird watching it all go down. He doesn't really have any real defenses from an argument perspective.

Whats sad is he does care about LT value, but runs SD it like its his fief.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 15, 2012, 06:04:15 PM
Interesting.

http://www.bizjournals.com/prnewswire/press_releases/2012/11/15/NE13858

Mount Kellett is the same firm who went activist on CLWR a couple of weeks ago.

One of the member in this board?
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on November 16, 2012, 11:07:59 AM
Dinakar Singh, CEO of hedge fund TPG-Axon Capital
http://www.bloomberg.com/video/sandridge-management-is-not-trusted-singh-says-xacJJMnnSBCEylg2oXcMbA.html
Title: Re: SD - SandRidge Energy
Post by: zippy1 on November 16, 2012, 02:58:19 PM
Prem is back in with 54m shares. or did I read that right
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf= (http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf=)
Title: Re: SD - SandRidge Energy
Post by: Grenville on November 16, 2012, 03:06:16 PM
Prem is back in with 54m shares. or did I read that right
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf= (http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf=)

10.5%! should make things interesting with TPG/AXON!

Some of that 8bln in cash is going to work.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 16, 2012, 03:14:49 PM
Prem is back in with 54m shares. or did I read that right
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf= (http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf=)

10.5%! should make things interesting with TPG/AXON!

Some of that 8bln in cash is going to work.


Is Prem going to support a change in management (i.e. support TPG & Mount Kellet) or will he back TW? With TPG, Mount Kellet and FFH against him I don't think TW could stay.....should be very very interesting.

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 16, 2012, 03:57:04 PM
Not sure how close Prem and Ward are but Ward has been to the last 2 annual meetings. I cant see Prem voting against him, sort of goes against Fair and Friendly. With that said I think they will all come up with a solution that makes money for everyone.

You also have Riverstone, and other groups. Not sure where they will go given the situation.  There are a few GS funds on one side, Prem and probably Management on the other, and T Boone, Riverstone, and most other shareholders in the middle.

This will get interesting, but will probably play out similar to CHK did...
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on November 16, 2012, 05:28:13 PM
If I am not mistaken Tom Ward has been to the past 3 FFH annual meetings.  I think Prem is in his court and I would not be surprised to see Sam Mitchell appointed to SD's Board before for too long.  He seems to be Prem's lieutenant when it comes to getting management back on the straight and narrow - past examples ICO and OSTK.  Also another player we may join the SD party is Wilbur Ross, who is also very persuasive.  From everything I am reading - SD has great assets it is just the TW is all over the map and somewhat greedy.   With big reputable players like this I have a feeling Tom may be listening a little more.
Title: Re: SD - SandRidge Energy
Post by: txlaw on November 16, 2012, 05:53:48 PM
Been buying LEAPS on this one.  Nice to see the FFH filing.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 16, 2012, 06:18:49 PM
Interesting, I am all for selling it at the right price.
Look like people have lost patience on TW. Can't blame them, the gas to oil transformation is done and SD still trades at 5. This partly is because TW is having new direction every 6 months. He is building value, too bad no one is willing to pay for it because they are scared of what's next.
Title: Re: SD - SandRidge Energy
Post by: Grenville on November 16, 2012, 11:49:34 PM
If I am not mistaken Tom Ward has been to the past 3 FFH annual meetings.  I think Prem is in his court and I would not be surprised to see Sam Mitchell appointed to SD's Board before for too long.  He seems to be Prem's lieutenant when it comes to getting management back on the straight and narrow - past examples ICO and OSTK.  Also another player we may join the SD party is Wilbur Ross, who is also very persuasive.  From everything I am reading - SD has great assets it is just the TW is all over the map and somewhat greedy.   With big reputable players like this I have a feeling Tom may be listening a little more.

I assumed Sam was on the board. I hope Fairfax gets him on the board. He answers plenty of the gas/oil questions at the shareholder dinner if I remember correctly.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on November 17, 2012, 01:56:21 AM
I don't think Sam Mitchell is on the board according to the corporate site.
http://www.sandridgeenergy.com/about/board-of-directors/ (http://www.sandridgeenergy.com/about/board-of-directors/)
Does anyone has comments about these members?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 17, 2012, 07:01:45 AM
Prem is back in with 54m shares. or did I read that right
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf= (http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D12%2D474276%2Etxt&FilePath=%5C2012%5C11%5C16%5C&CoName=SANDRIDGE+ENERGY+INC&FormType=SC+13G%2FA&RcvdDate=11%2F16%2F2012&pdf=)

10.5%! should make things interesting with TPG/AXON!

Some of that 8bln in cash is going to work.

Not sure how to read this, it is showing multiple entities.. and they hold preferred too ... i guess they can't pull a FBK type forced buyout as SD has poison pill in place if I remember correctly.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 17, 2012, 07:22:20 AM
if u compare the May and the latest presentation, ROR in MISS drops like ~20+%  even with the assumed gas price increased to 4.25 from $2.5. Probably get dragged down by the extension.. now up to 1.85 net acres!

At today strip, probably about 45% ROR, still better than Bakken!

I think TW is betting NG price will firm up and oil price will tend flat or down in few years - that's why they sell Permian?

They are paying 8%.. which isn't bad for its metrics. I don't think they can lower that by much even with a new CEO.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 17, 2012, 07:48:33 AM
Is it possible that sd wants to buy out Chk miss interest? That makes sense from scale perspective.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 17, 2012, 10:29:33 AM
if u compare the May and the latest presentation, ROR in MISS drops like ~20+%  even with the assumed gas price increased to 4.25 from $2.5. Probably get dragged down by the extension.. now up to 1.85 net acres!

At today strip, probably about 45% ROR, still better than Bakken!

I think TW is betting NG price will firm up and oil price will tend flat or down in few years - that's why they sell Permian?

They are paying 8%.. which isn't bad for its metrics. I don't think they can lower that by much even with a new CEO.


It seems to me that the market has lost what little confidence they had in TW and something has to be done. The announcement of SD selling the Permian basin gives the impression that TW has no clear strategy and is floundering around, thus the sell off.

The are going to have to be some hard decisions made, and made soon. You can install an new board, with representation from major shareholders similar to what happened at CHK, and try to "fix things" or you can try to break up SD and sell off the assets. Assets that I think are worth far more than the $14 per share TPG was talking about.

My question is will Prem simply back TW or will he support the idea a new board. TW may be a good "land man" but he doesn't seem to be so good on the execution side of things. I like the idea of Sam Mitchell being on the board, don't like the idea of selling the Permian, but will have to wait and see what happens. Anyone adding at this point??

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 17, 2012, 11:08:16 AM
Here is an interesting article by Devon Shire, who posts on this board, but under a different name (that I can't remember   :( )

http://seekingalpha.com/article/1015741-sandridge-shareholders-don-t-owe-ceo-ward-any-favors

Here is an interesting point that I wasn't aware of....


One fact summarizes the appalling corporate governance practices of SandRidge - despite the single worst stock performance of any energy company, and among the worst stock performances in the entire US market, and massive discounts applied to the company because of management…payments to Mr. Ward from the company have totaled approximately $150 million over the past five years (astonishing, given the $3 billion market capitalization of the company).

- The most disturbing example has been the Executive Well Participation Plan, (similar to the founder well participation policy at Chesapeake Energy that caused enormous outrage earlier this year). When concerns regarding Mr. Ward's ties to Chesapeake Energy arose this spring, Mr. Ward repeatedly asserted to us, other shareholders, and the media that SandRidge was different, and that over time he and the company recognized the inappropriateness of this practice, and eliminated it to avoid any appearance of impropriety. We investigated his claims, and were appalled by what we found. It is true that SandRidge has eliminated their Executive Well Participation Plan. However, they did so immediately after the market collapse in October 2008, by then paying over $67 million to Mr. Ward, even as 1) markets were collapsing, and 2) the company had less than $1 million in cash and was facing real risk of bankruptcy.


cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: biaggio on November 17, 2012, 02:55:38 PM
Here is an interesting article by Devon Shire, who posts on this board, but under a different name (that I can't remember   :( )

http://seekingalpha.com/article/1015741-sandridge-shareholders-don-t-owe-ceo-ward-any-favors

Here is an interesting point that I wasn't aware of....


One fact summarizes the appalling corporate governance practices of SandRidge - despite the single worst stock performance of any energy company, and among the worst stock performances in the entire US market, and massive discounts applied to the company because of management…payments to Mr. Ward from the company have totaled approximately $150 million over the past five years (astonishing, given the $3 billion market capitalization of the company).

- The most disturbing example has been the Executive Well Participation Plan, (similar to the founder well participation policy at Chesapeake Energy that caused enormous outrage earlier this year). When concerns regarding Mr. Ward's ties to Chesapeake Energy arose this spring, Mr. Ward repeatedly asserted to us, other shareholders, and the media that SandRidge was different, and that over time he and the company recognized the inappropriateness of this practice, and eliminated it to avoid any appearance of impropriety. We investigated his claims, and were appalled by what we found. It is true that SandRidge has eliminated their Executive Well Participation Plan. However, they did so immediately after the market collapse in October 2008, by then paying over $67 million to Mr. Ward, even as 1) markets were collapsing, and 2) the company had less than $1 million in cash and was facing real risk of bankruptcy.


cheers
Zorro

That sounds pretty bad.

I am surprised that he is supported by the folks at FFH. Perhaps there is another side to the story.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 17, 2012, 07:13:01 PM
Here is an interesting article by Devon Shire, who posts on this board, but under a different name (that I can't remember   :( )

http://seekingalpha.com/article/1015741-sandridge-shareholders-don-t-owe-ceo-ward-any-favors

Here is an interesting point that I wasn't aware of....


One fact summarizes the appalling corporate governance practices of SandRidge - despite the single worst stock performance of any energy company, and among the worst stock performances in the entire US market, and massive discounts applied to the company because of management…payments to Mr. Ward from the company have totaled approximately $150 million over the past five years (astonishing, given the $3 billion market capitalization of the company).

- The most disturbing example has been the Executive Well Participation Plan, (similar to the founder well participation policy at Chesapeake Energy that caused enormous outrage earlier this year). When concerns regarding Mr. Ward's ties to Chesapeake Energy arose this spring, Mr. Ward repeatedly asserted to us, other shareholders, and the media that SandRidge was different, and that over time he and the company recognized the inappropriateness of this practice, and eliminated it to avoid any appearance of impropriety. We investigated his claims, and were appalled by what we found. It is true that SandRidge has eliminated their Executive Well Participation Plan. However, they did so immediately after the market collapse in October 2008, by then paying over $67 million to Mr. Ward, even as 1) markets were collapsing, and 2) the company had less than $1 million in cash and was facing real risk of bankruptcy.


cheers
Zorro

That sounds pretty bad.

I am surprised that he is supported by the folks at FFH. Perhaps there is another side to the story.


I was also surprised when I realized FFH work with RFP to get FBK at 1$ and rejected MERC's offer @ 1.4... thinking back, I don't really know Prem or any folks in FFH other than a few CCs, so I should not be surprised.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on November 17, 2012, 09:32:53 PM
Agree that some of Ward 's past behavior at SD had ethical problem; no idea why FFH is still tolerant

Here is an interesting article by Devon Shire, who posts on this board, but under a different name (that I can't remember   :( )

http://seekingalpha.com/article/1015741-sandridge-shareholders-don-t-owe-ceo-ward-any-favors

Here is an interesting point that I wasn't aware of....


One fact summarizes the appalling corporate governance practices of SandRidge - despite the single worst stock performance of any energy company, and among the worst stock performances in the entire US market, and massive discounts applied to the company because of management…payments to Mr. Ward from the company have totaled approximately $150 million over the past five years (astonishing, given the $3 billion market capitalization of the company).

- The most disturbing example has been the Executive Well Participation Plan, (similar to the founder well participation policy at Chesapeake Energy that caused enormous outrage earlier this year). When concerns regarding Mr. Ward's ties to Chesapeake Energy arose this spring, Mr. Ward repeatedly asserted to us, other shareholders, and the media that SandRidge was different, and that over time he and the company recognized the inappropriateness of this practice, and eliminated it to avoid any appearance of impropriety. We investigated his claims, and were appalled by what we found. It is true that SandRidge has eliminated their Executive Well Participation Plan. However, they did so immediately after the market collapse in October 2008, by then paying over $67 million to Mr. Ward, even as 1) markets were collapsing, and 2) the company had less than $1 million in cash and was facing real risk of bankruptcy.


cheers
Zorro

That sounds pretty bad.

I am surprised that he is supported by the folks at FFH. Perhaps there is another side to the story.


I was also surprised when I realized FFH work with RFP to get FBK at 1$ and rejected MERC's offer @ 1.4... thinking back, I don't really know Prem or any folks in FFH other than a few CCs, so I should not be surprised.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 19, 2012, 01:12:24 PM
I'm guessing that Sandridge is in play or at the very least there are big changes coming.  Mount Kellett has sent a letter to Sandridge......

http://finance.yahoo.com/news/mount-kellett-sends-letter-board-152200527.html


cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: Grenville on November 19, 2012, 01:20:25 PM
Sandridge puts in place a poison pill.
http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1760383&highlight= (http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1760383&highlight=)

I wonder how this impacts Fairfax's 10.5% stake reported recently. The right's plan is as of November 29. Does Fairfax's stake trigger the right's?
Title: Re: SD - SandRidge Energy
Post by: Grenville on November 19, 2012, 01:23:43 PM
Just answered my own question. From the filing above:

"Under the Rights Plan, the rights generally will become exercisable only if a person or group acquires beneficial ownership of 10 percent (or 15 percent in the case of certain institutional investors who report their holdings on Schedule 13G, as described in the Rights Plan) or more of SandRidge's common stock.  "

Threshold is 15% for the 13G filer.
Title: Re: SD - SandRidge Energy
Post by: ItsAValueTrap on November 19, 2012, 02:02:19 PM
You could look into the relationship between Mount Kellett and Baja Mining.  IKN has some pretty good coverage here:
http://incakolanews.blogspot.ca/search/label/BAJ.to

Basically, if you look back into history:
A- Mount Kellett was right about awful management.
B- They were wrong about the value of the assets it was buying.  Mount Kellett got burned.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on November 19, 2012, 02:29:08 PM
Here are some of the largest shareholders....

GOLDMAN SACHS GROUP INC                         22,516,730   
Mount Kellett Capital Management LP         22,224,807   
TPG-AXON CAPITAL MANAGEMENT LP         15,056,075   
BlackRock Institutional Trust Company, N.A.   9,889,960   
Riverstone Holdings LLC                                51,370,888   
Carlyle Group L.P.                                        51,370,888   


Add FFH's 54 million shares and there is more than enough to force a change in the board if they want, without anyone buying another share. Perhaps TW should take the hint and exit gracefully....but not likely.

cheers
Zorro

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 19, 2012, 04:35:00 PM
this will prevent a FBK like forced takeover. Good to hear.

Edit: I mistakenly thought they have one in place already. So, they have 10 days to buy as much as possible if they really think SD worth 12-14$. Talk is cheap.

Title: Re: SD - SandRidge Energy
Post by: Mikenhe on November 19, 2012, 05:39:17 PM
Here are some of the largest shareholders....

GOLDMAN SACHS GROUP INC                         22,516,730   
Mount Kellett Capital Management LP         22,224,807   
TPG-AXON CAPITAL MANAGEMENT LP         15,056,075   
BlackRock Institutional Trust Company, N.A.   9,889,960   
Riverstone Holdings LLC                                51,370,888   
Carlyle Group L.P.                                        51,370,888   


Add FFH's 54 million shares and there is more than enough to force a change in the board if they want, without anyone buying another share. Perhaps TW should take the hint and exit gracefully....but not likely.

cheers
Zorro

Riverstone is FFH
Title: Re: SD - SandRidge Energy
Post by: Sportgamma on November 19, 2012, 05:48:25 PM
Quote
Another shareholder, Prem Watsa of Fairfax Financial Holdings Ltd. (FFH), increased his stake in the company and praised its chief executive, Tom Ward.

“We believe Tom Ward is one of the best operators in the business and that the company he has built, SandRidge Energy, is poised to do well in the long term,” Watsa said in an interview

http://www.bloomberg.com/news/2012-11-19/sandridge-energy-adopts-shareholder-rights-plan-changes-bylaws.html?cmpid=yhoo
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 19, 2012, 06:09:56 PM
Watsa is with Ward, not sure how he can feel ok with the self dealing though at SD. Ward is however getting 7% - 8% on preferred stock and will be paid out in the long term once the shares rise. Ward has created value over the long term, but destroyed SDs credibility in the market. The market wont reward him for years to come inmo. This is getting very interesting. FFH will probably buy up to 15% with the GS funds being stuck at 10%. I am sure they have friends in high places who can buy up more shares though.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 19, 2012, 06:28:18 PM
so now will TPG and co just sit idle.

SD will get a bid soon would be my bet. Unlike CHK, SD is small enough that majors sit with cash can swallow it easily.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 19, 2012, 07:49:55 PM
I dont think the plan ever was for TPG and others to buy up the company and change Management. I would also guess if put to a vote today TPG and company would win most of the none FFH / Insider votes. I have been consistently bullish on SD and my faith in the assets with the increased gas and reduced oil, as well as in Ward's long term plan (what is it again) is shaken for the assets and pretty much gone for Ward. There is value there, but I would prefer a quick sale, vs a few more years of this directionless leadership.

DOR made since in the context it was aired, but it didnt pan out and someone has to pay for that. I dont like the percentage of PV10 we paid for it either (considering we are selling the Permian for probably the same percentage or less), without any hidden value or upside. The main upside would have to come with bolt on acquisitions at 2x CF, and we dont have the balance sheet for that. Its a great platform, but we overpaid if we cant leverage their M&A team, and we cant even afford to develop what we have, yet alone buy more. The Miss EUR change isnt Managements fault, but they have really left the company little room to play with, and even refused to do more JVs to reduce some of the risks.

I think they have a bid lined up. At $10-$15 everyone would be happy except for Ward, even the acquirer would see a bit of upside at the right price. It will be interesting. I have my popcorn.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 19, 2012, 07:53:11 PM
i didn't imply TPG will be the buyer.

There probably something happening in the background right now that caused all these.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 19, 2012, 08:04:26 PM
Im not saying you did, im just saying I dont think the plan was to keep buying shares till they had enough to control the company. Plus this doesnt do much because they have enough entities interested which are all separate. Hell it looks like there are 4 entities with a GS background. I am sure Ichan will pop up sooner or later as well.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 19, 2012, 08:16:46 PM
Sd has even more valuable asset now that ng price firm up,
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 19, 2012, 08:34:58 PM
I agree thats the one brightside inmo. I have been bearish on Nat Gas since 2009 though, but we may have $4 or $5 gas. Also is still room for upside in the Miss as they reduce costs, and as the plays type curve, EUR, etc. develops. I guess as we learned this last quarter though there is downside risk as well.

$4 billion for the Permian would be great though. We likely wont get as much on the Miss with these updated results and CHK selling / JVing a huge stake. Probably better to wait.
Title: Re: SD - SandRidge Energy
Post by: Grenville on November 19, 2012, 09:08:31 PM
Here are some of the largest shareholders....

GOLDMAN SACHS GROUP INC                         22,516,730   
Mount Kellett Capital Management LP         22,224,807   
TPG-AXON CAPITAL MANAGEMENT LP         15,056,075   
BlackRock Institutional Trust Company, N.A.   9,889,960   
Riverstone Holdings LLC                                51,370,888   
Carlyle Group L.P.                                        51,370,888   


Add FFH's 54 million shares and there is more than enough to force a change in the board if they want, without anyone buying another share. Perhaps TW should take the hint and exit gracefully....but not likely.

cheers
Zorro

Riverstone is FFH

Riverstone isn't FFH. I thought it was the runoff group, but it's another energy investment company:
http://sec.gov/Archives/edgar/data/1247497/000101143812000336/form_13f-riverholdings.txt (http://sec.gov/Archives/edgar/data/1247497/000101143812000336/form_13f-riverholdings.txt)

http://www.riverstonellc.com (http://www.riverstonellc.com)

Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 19, 2012, 09:15:51 PM
I think Riverstone and Carlyle got the shares via the DOR acquisition. Its interesting, I like Ward, but he is kind of playing with everyone's money. He bought DOR so he has to have a decent relationship with the sellers but this is business. Not sure how they would vote. He may have them and FFH locked up though.

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CE0QFjAE&url=http%3A%2F%2Fwww.thedeal.com%2Fcontent%2Fprivate-equity%2Friverstone-carlyle-will-reap-hefty-profits-from-dynamic-offshore.php&ei=ORKrUI-6IcfJswaVwICoDw&usg=AFQjCNF_BbN8DadPu1Uu7XvXdKb06DKF3w&sig2=s2p8ve1KLEPbuV3fCQxhbQ
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 20, 2012, 09:17:01 PM
I think Riverstone and Carlyle got the shares via the DOR acquisition. Its interesting, I like Ward, but he is kind of playing with everyone's money. He bought DOR so he has to have a decent relationship with the sellers but this is business. Not sure how they would vote. He may have them and FFH locked up though.

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CE0QFjAE&url=http%3A%2F%2Fwww.thedeal.com%2Fcontent%2Fprivate-equity%2Friverstone-carlyle-will-reap-hefty-profits-from-dynamic-offshore.php&ei=ORKrUI-6IcfJswaVwICoDw&usg=AFQjCNF_BbN8DadPu1Uu7XvXdKb06DKF3w&sig2=s2p8ve1KLEPbuV3fCQxhbQ


Their vote will depend on what's offered, Riverstone and Carlyle cost base is 8 bucks.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on November 20, 2012, 10:01:42 PM
Very good point. Only time will tell, I am sure the phones are being worked by all parties as we speak.
Title: Re: SD - SandRidge Energy
Post by: Mikenhe on November 21, 2012, 06:40:46 AM
Here are some of the largest shareholders....

GOLDMAN SACHS GROUP INC                         22,516,730   
Mount Kellett Capital Management LP         22,224,807   
TPG-AXON CAPITAL MANAGEMENT LP         15,056,075   
BlackRock Institutional Trust Company, N.A.   9,889,960   
Riverstone Holdings LLC                                51,370,888   
Carlyle Group L.P.                                        51,370,888   


Add FFH's 54 million shares and there is more than enough to force a change in the board if they want, without anyone buying another share. Perhaps TW should take the hint and exit gracefully....but not likely.

cheers
Zorro

Riverstone is FFH

Riverstone isn't FFH. I thought it was the runoff group, but it's another energy investment company:
http://sec.gov/Archives/edgar/data/1247497/000101143812000336/form_13f-riverholdings.txt (http://sec.gov/Archives/edgar/data/1247497/000101143812000336/form_13f-riverholdings.txt)

http://www.riverstonellc.com (http://www.riverstonellc.com)

ohhh!  good spot...

I should have looked closer at that! Thanks.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on November 21, 2012, 07:45:02 PM
march 13 4$ can be have with 2% premium... i am thinking.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on November 30, 2012, 07:50:24 AM
http://www.4-traders.com/SANDRIDGE-ENERGY-INC-66802/news/SandRidge-Energy-Inc-TPG-Axon-Sends-Second-Letter-to-SandRidge-Board-of-Directors-15560498/

Second letter by TPG.

Very interesting event stock now that there are some potential catalysts in place (finally).



Long SD
Title: Re: SD - SandRidge Energy
Post by: muscleman on November 30, 2012, 10:04:01 AM
http://www.4-traders.com/SANDRIDGE-ENERGY-INC-66802/news/SandRidge-Energy-Inc-TPG-Axon-Sends-Second-Letter-to-SandRidge-Board-of-Directors-15560498/

Second letter by TPG.

Very interesting event stock now that there are some potential catalysts in place (finally).



Long SD

Yes, I agree. It is interesting to see what will happen now. TPG only has 5% of the shares, so it can't do this on its own.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on November 30, 2012, 10:20:44 AM
I just hope Fairfax doesn't continue this charade of supporting TW and block a sale for example...

Title: Re: SD - SandRidge Energy
Post by: bmichaud on November 30, 2012, 11:52:38 AM
Full letter attached.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on November 30, 2012, 12:15:14 PM
This is a fascinating letter, and if true, utterly SHOCKING Fairfax supports this guy. Perhaps TPG is making it all up in order to gain shareholder support....

Makes me wonder about another so-called "genius"....LVLT's stock price has spoken over the past 10 years - would be an interesting case study seeing how Crowe has been compensated for such brilliance.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on November 30, 2012, 03:36:53 PM
There is a new 13D by TPG today.  They increased from 23m shares to 28.5m shares, I think.
Title: Re: SD - SandRidge Energy
Post by: txlaw on November 30, 2012, 03:47:04 PM
So Myth and other O&G focused investors, what do you guys think of the substance of the TPG-Axon letter?
Title: Re: SD - SandRidge Energy
Post by: txlaw on November 30, 2012, 03:57:16 PM
So Myth and other O&G focused investors, what do you guys think of the substance of the TPG-Axon letter?

With respect to the strategy part, I mean, not the part focused on structural challenges, which is pretty convincing.
Title: Re: SD - SandRidge Energy
Post by: Packer16 on November 30, 2012, 04:03:54 PM
It looks like TPG-Axon brings up pretty good points (esp. on compensation and overhead versus other E&P cos).  I like the underlying assets (esp. Mississippian) that is why I bought.  I would like to see TW's response to the points.  The 2 points that I think are most relevant are the higher G&A costs and the amount of cap-ex required to bring the fields online over a short period of time or lose the drilling rights.  It is interesting that TPG brought up the point of higher interest costs as FFH is a beneficiary via preferred but not as a common holder.  Similar to Level 3.  I bought at a higher price and am holding for now.  Maybe I should have bought the preferreds.

Packer
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 03, 2012, 01:33:00 PM
So Myth and other O&G focused investors, what do you guys think of the substance of the TPG-Axon letter?

Im 110% behind TPG. As I said earlier in this thread my confidence in SD was truly shaken when ROI went from 90%+ to mid 40%. I thought SD had a secret sauce of sweet spot, efficiency, and scale. I thought they were handling risk properly by hedging and didnt care about cost of capital being in the 9% range with returns being in the 90% range.

I always knew Ward would take a disproportionate piece of the pie, but figured hey there is a lot of pie. I was looking for the hidden upside in DOR, but havent seen it. The only upside is bolt ons at 2x and if Ward buys something in the Gulf, the share price goes down and cost of capital goes up so thats a none starter.

Ward would like to grow SD into a massive major, bigger then CHK, and will make money either way by skimming it off the top or via eventual share expansion.
Prem gets paid to wait, has converts on eventually share expansion, and has first debs on the assets. Its in his best interest to collect his 6-9% for years and eventually reap a capital gain via share expansion or by taking over the assets should Ward screw up.

I as a common and options holder just want to make money, and most importantly not lose money via time value. I want a consistent strategy with consistent goals that I can hold Management to.

Our interests are not aligned, and TPG has my interest at heart. I need to read the entire second letter as I have only skimmed it thus far, but thats how I feel.
An options play at this minute with 2 years expiry is how I would play it. TPG has a plan, deep pockets, and friends in high places. I dont know if Ward can convince enough people to put skin in the game for him with the internal dealings. But hostiles just dont happen with oil and gas.

Icahn will take a 10% stake sooner or later inmo. This is peanuts for him.
Title: Re: SD - SandRidge Energy
Post by: txlaw on December 03, 2012, 01:38:49 PM
So Myth and other O&G focused investors, what do you guys think of the substance of the TPG-Axon letter?

Im 110% behind TPG. As I said earlier in this thread my confidence in SD was truly shaken when ROI went from 90%+ to mid 40%. I thought SD had a secret sauce of sweet spot, efficiency, and scale. I thought they were handling risk properly by hedging and didnt care about cost of capital being in the 9% range with returns being in the 90% range.

I always knew Ward would take a disproportionate piece of the pie, but figured hey there is a lot of pie. I was looking for the hidden upside in DOR, but havent seen it. The only upside is bolt ons at 2x and if Ward buys something in the Gulf, the share price goes down and cost of capital goes up so thats a none starter.

Ward would like to grow SD into a massive major, bigger then CHK, and will make money either way by skimming it off the top or via eventual share expansion.
Prem gets paid to wait, has converts on eventually share expansion, and has first debs on the assets. Its in his best interest to collect his 6-9% for years and eventually reap a capital gain via share expansion or by taking over the assets should Ward screw up.

I as a common and options holder just want to make money, and most importantly not lose money via time value. I want a consistent strategy with consistent goals that I can hold Management to.

Our interests are not aligned, and TPG has my interest at heart. I need to read the entire second letter as I have only skimmed it thus far, but thats how I feel.
An options play at this minute with 2 years expiry is how I would play it. TPG has a plan, deep pockets, and friends in high places. I dont know if Ward can convince enough people to put skin in the game for him with the internal dealings. But hostiles just dont happen with oil and gas.

Icahn will take a 10% stake sooner or later inmo. This is peanuts for him.

Thanks for your thoughts.  Please do take a look at the second letter and, if you wish, provide more detail on TPG-Axon's arguments.
Title: Re: SD - SandRidge Energy
Post by: twacowfca on December 03, 2012, 03:16:18 PM
So Myth and other O&G focused investors, what do you guys think of the substance of the TPG-Axon letter?

Im 110% behind TPG. As I said earlier in this thread my confidence in SD was truly shaken when ROI went from 90%+ to mid 40%. I thought SD had a secret sauce of sweet spot, efficiency, and scale. I thought they were handling risk properly by hedging and didnt care about cost of capital being in the 9% range with returns being in the 90% range.

I always knew Ward would take a disproportionate piece of the pie, but figured hey there is a lot of pie. I was looking for the hidden upside in DOR, but havent seen it. The only upside is bolt ons at 2x and if Ward buys something in the Gulf, the share price goes down and cost of capital goes up so thats a none starter.

Ward would like to grow SD into a massive major, bigger then CHK, and will make money either way by skimming it off the top or via eventual share expansion.
Prem gets paid to wait, has converts on eventually share expansion, and has first debs on the assets. Its in his best interest to collect his 6-9% for years and eventually reap a capital gain via share expansion or by taking over the assets should Ward screw up.

I as a common and options holder just want to make money, and most importantly not lose money via time value. I want a consistent strategy with consistent goals that I can hold Management to.

Our interests are not aligned, and TPG has my interest at heart. I need to read the entire second letter as I have only skimmed it thus far, but thats how I feel.
An options play at this minute with 2 years expiry is how I would play it. TPG has a plan, deep pockets, and friends in high places. I dont know if Ward can convince enough people to put skin in the game for him with the internal dealings. But hostiles just dont happen with oil and gas.

Icahn will take a 10% stake sooner or later inmo. This is peanuts for him.

Thanks for your thoughts.  Please do take a look at the second letter and, if you wish, provide more detail on TPG-Axon's arguments.

This one has always been in my too hard pile.  The main thing to recommend it has been Prem's stake, but he has been in and out, and his current stake is somewhat protected with owning preferreds. 

If TPG's letters are not entirely fiction, their indictment is devastating.  It explains some of some of SandRidge's strange actions like buying D. Off.  The motivation  now appears to have been to buy EBITDA to avoid breaking their covenants on their debt.  Never mind that they bought crappy assets with rapidly declining production at an inflated price that will require lots of future capex to keep production from declining rapidly. 

The other thing that stood out the most for me was Ward having one old business jet plus two old prop planes before their IPO and now a modern fleet of jets, including a $50M intercontinental business jet that he uses to travel free to many vacation spots while their assets are all within 500 miles of their headquarters.

Oh, I almost forgot to mention that his buddy directors who are light in industry experience are paid more than Exxon Mobile's directors.  Yikes! 
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 05, 2012, 06:10:10 AM
So Myth and other O&G focused investors, what do you guys think of the substance of the TPG-Axon letter?

Im 110% behind TPG. As I said earlier in this thread my confidence in SD was truly shaken when ROI went from 90%+ to mid 40%. I thought SD had a secret sauce of sweet spot, efficiency, and scale. I thought they were handling risk properly by hedging and didnt care about cost of capital being in the 9% range with returns being in the 90% range.

I always knew Ward would take a disproportionate piece of the pie, but figured hey there is a lot of pie. I was looking for the hidden upside in DOR, but havent seen it. The only upside is bolt ons at 2x and if Ward buys something in the Gulf, the share price goes down and cost of capital goes up so thats a none starter.

Ward would like to grow SD into a massive major, bigger then CHK, and will make money either way by skimming it off the top or via eventual share expansion.
Prem gets paid to wait, has converts on eventually share expansion, and has first debs on the assets. Its in his best interest to collect his 6-9% for years and eventually reap a capital gain via share expansion or by taking over the assets should Ward screw up.

I as a common and options holder just want to make money, and most importantly not lose money via time value. I want a consistent strategy with consistent goals that I can hold Management to.

Our interests are not aligned, and TPG has my interest at heart. I need to read the entire second letter as I have only skimmed it thus far, but thats how I feel.
An options play at this minute with 2 years expiry is how I would play it. TPG has a plan, deep pockets, and friends in high places. I dont know if Ward can convince enough people to put skin in the game for him with the internal dealings. But hostiles just dont happen with oil and gas.

Icahn will take a 10% stake sooner or later inmo. This is peanuts for him.

I am a common holder and I feel the pain.
How likely do you think that an activist will succeed? I am sure if TW and his team are that bad, they will try their best to protect their economic interest unless there is some law or regulator that force them to resign.
I remember that Buffet said before that he tried to be an activist for some company but eventually decided it was too much pain.
I think at this point, it is possible to force TW and his team to resign, but this will likely be as painful as a divorce.
Title: Re: SD - SandRidge Energy
Post by: value-is-what-you-get on December 05, 2012, 07:00:35 AM
I just hope Fairfax doesn't continue this charade of supporting TW and block a sale for example...

Perhaps a few questions will be asked at Sanjeev's FFH shareholder dinner.

Which company jet did you use to get here?
How did that cost benefit your shareholders?
Title: Re: SD - SandRidge Energy
Post by: twacowfca on December 05, 2012, 09:17:30 AM
bmichaud, thanks for your question. 

I don't know how much Sandridge is worth under current management.  It's apparently worth something north of what TPG and other increasingly activist funds paid for it recently if sold in part in whole or if acquired.  If it is worth midway between the current price and what the activists claim, that would still be a very nice gain.  A sale or breakup should be resisted by the entrenched management with their hands in a huge cookie jar, but the situation is so stinky, I think it is more likely than not that the activists will eventually get their way. 

Prem is the key, if his statement is carefully read, it isn't wholehearted support. It merely says TW is a good operator, not necessarily admirable in every respect.  The logical thing for Prem to do is work behind the scenes to encourage Ward to get the best possible price.  Ward will have difficulty accessing financing in the future because of the big stink.  Hopefully, he will see the writing on the wall and realize he won't be able to keep his sweetheart deal going much longer. 

The second key is what's in it for Ward.  Does he have a golden parachute with a change of control or a liquidation or breakup?  How much is that worth?  The answer to that question is very important.  :)
Title: Re: SD - SandRidge Energy
Post by: abcd on December 05, 2012, 10:20:40 AM
Quote
Termination without Cause. The Company may terminate the Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten days after the date of such notice (the “Termination Date”). If the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3.2 of this Agreement or on account of the Executive’s incapacity or death under paragraphs 6.4 and 6.5 of this Agreement), the Executive will receive as termination compensation:

(a) his Base Salary as in effect on the Termination Date (without regard to any reductions constituting a breach of this Agreement) for a period of thirty-six months;

(b) an amount equal to three times the “Average Bonus” (defined as the average annual bonus compensation paid pursuant to paragraph 4.2 over the three years preceding the Termination Date), payable in a lump sum, in cash; and

(c) any PTO accrued through his Termination Date, payable in a lump sum, in cash.

http://www.sec.gov/Archives/edgar/data/1349436/000119312511352901/d270965dex101.htm
Title: Re: SD - SandRidge Energy
Post by: twacowfca on December 05, 2012, 11:23:42 AM
Quote
Termination without Cause. The Company may terminate the Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten days after the date of such notice (the “Termination Date”). If the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3.2 of this Agreement or on account of the Executive’s incapacity or death under paragraphs 6.4 and 6.5 of this Agreement), the Executive will receive as termination compensation:

(a) his Base Salary as in effect on the Termination Date (without regard to any reductions constituting a breach of this Agreement) for a period of thirty-six months;

(b) an amount equal to three times the “Average Bonus” (defined as the average annual bonus compensation paid pursuant to paragraph 4.2 over the three years preceding the Termination Date), payable in a lump sum, in cash; and

(c) any PTO accrued through his Termination Date, payable in a lump sum, in cash.

http://www.sec.gov/Archives/edgar/data/1349436/000119312511352901/d270965dex101.htm

Thank you abcd.  Do you know how much the above are worth?

Ward may have other goodies available upon a sale.  Do any warrants or rights to receive restricted shares vest upon a change of control?  Is there an opportunity to receive accelerated retirement benefits upon change of control?
Title: Re: SD - SandRidge Energy
Post by: abcd on December 05, 2012, 12:53:34 PM
Quote
Equity Compensation Provisions.

Notwithstanding any provision to the contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination <edited>:

(a) all units, stock options, incentive stock options, performance shares, stock appreciation rights and restricted stock granted and held by the Executive immediately prior to such termination will immediately become 100% vested; and
(b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for the Executive’s termination of employment. To the extent the Company is unable to provide for one or both of the foregoing rights, the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options, performance shares, stock appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) <edited>

This looks relatively small
    Base salary at an annual rate of not less than 1,545,000 dollars so ( at least 3 times $1.545 million)
    Bonus: unspecified at the discretion of the Company

As per yahoo, the compensation (I am assuming this is Salary + Bonus) for 2011 is $4.5 million (times 3 would be the hit)

And there is this

Quote
To determine the number of shares to be awarded during the calendar year, the Company shall divide the grant date fair market value of the award, which shall be no less than 16,250,000 dollars, by the closing price of a share of the Company’s stock on the grant date. These awards shall be made under the Company’s Equity Compensation Plans, which shall govern the vesting and other terms and provisions of the awards, except that, if the Executive’s employment is terminated under circumstances that entitle him to benefits under paragraph 6.1.1 or 6.3, the Executive shall be entitled to receive cash or shares (in the Company’s discretion) equal in value to the long-term retention incentive
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 06, 2012, 01:33:42 PM
TPG launches website.

http://finance.yahoo.com/news/tpg-axon-launches-informational-website-181700207.html

These guys are serious. Ward is toast inmo. He will need to sell the company for $12 prior to being booted, I dont think he has enough friends to buy enough shares.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 06, 2012, 05:18:10 PM
I always said Ward would sort this out or SD would be taken over. Interesting to watch it play out. The majors are liquidating and could easily throw $10 billion at this problem. Plus would have either half the cost of capital or no cost of capital due to internal cash flows.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 06, 2012, 06:10:54 PM
anyone think we will get a bid out by year end?
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 06, 2012, 06:17:13 PM
TPG launches website.

http://finance.yahoo.com/news/tpg-axon-launches-informational-website-181700207.html

These guys are serious. Ward is toast inmo. He will need to sell the company for $12 prior to being booted, I dont think he has enough friends to buy enough shares.

I am glad that these guys are doing this. I am out break even yesterday.
I think even if they could do it, the return is 10-12 a share, but there is still some chance that they couldn't do it. So maybe the risk-reward ratio isn't that great.
What do you think is the likelyhood that TPG succeed, and in what time line? I think at this point it only makes sense to play call options.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 06, 2012, 06:51:41 PM
I think TPG will succeed. I think they locked things up before hand. Ward will have to find some greenmail or sale assets quickly. I have tried to buy additional calls (was going to move out of preferred and into options) for the last 5 days but my bid never gets hit. With 5% up each day. I will simple hold, my breakeven is around 9, but thats after taking profits last year and rolling forward my options. I probably have a slight gain right now.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 06, 2012, 07:20:21 PM
I think TPG will succeed. I think they locked things up before hand. Ward will have to find some greenmail or sale assets quickly. I have tried to buy additional calls (was going to move out of preferred and into options) for the last 5 days but my bid never gets hit. With 5% up each day. I will simple hold, my breakeven is around 9, but thats after taking profits last year and rolling forward my options. I probably have a slight gain right now.

My leaps have 10$ strike. Hopefully, someone offer better than this.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 06, 2012, 07:31:18 PM
I think TPG will succeed. I think they locked things up before hand. Ward will have to find some greenmail or sale assets quickly. I have tried to buy additional calls (was going to move out of preferred and into options) for the last 5 days but my bid never gets hit. With 5% up each day. I will simple hold, my breakeven is around 9, but thats after taking profits last year and rolling forward my options. I probably have a slight gain right now.

What if an evil player joins the party?
Suppose I am the most evil trader in the world, and I have a lot of resources, how do I make the most out of this play? I would keep buying the shares until December 13th, preferrably way more than 15%, ally over a few more evil folks so we add up to over 50%, vote against TPG's solicitation, and then on the 14th, All my evil friends and I sell all shares, and go fully short.
At that point, what would happen? If TPG's solicitation cannot go through, the price will crash for sure. Also notice that the previous poison pill that grants shareholder rights to buy more shares will cause dilution, therefore favorable for short sellers and prevents hostile takeover. If I buy more than 15%, I would trigger that poison pill, and the result will either be nothing or something favourable for shorts.
After that, will some leveraged buyout or takeover happen, if price drops to too low? I think with that poison pill in place, no one would have the courage to try to force takeover.

I might be a bit thinking like a fiction writer. I am wondering how likely will this happen. If this is unlikely, then probably it is worth buying some call options. Otherwise I would rather look at other investments than risking my hard earned money on this one.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 06, 2012, 08:10:51 PM
muscle I dont see how you make money on that one. You would lose on the shares you had, or on the short position. Everyone is in this game to make money, evil is just a buy product of that greater cause inmo  :)
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on December 07, 2012, 09:07:40 AM
http://www.optionmonster.com/news/article.php?page=sandridge_draws_bullish_3way_spread_75952.html

Quote
More than 122,000 SD options have traded so far today, already about 6 times its daily average in the last month. A trader sold 12,000 June 6 calls for $1.59 against open interest of more than 28,000. At the same time, he or she bought 24,000 June 7 calls for $1.13 and sold two blocks of 12,000 June 9 calls for $0.50 and $0.49, with volume at each of those strikes above open interest.

This is before noon New York time...
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 07, 2012, 09:20:59 AM
This is unreal. It is a mad rush to make the Dec 13 deadline....
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 07, 2012, 12:31:24 PM
Did I miss something? what the significance of Dec 13?
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 07, 2012, 12:48:41 PM
Did I miss something? what the significance of Dec 13?

Record date for the consent solicitation.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 07, 2012, 01:05:58 PM
Interesting.

Did I miss something? what the significance of Dec 13?

Record date for the consent solicitation.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 07, 2012, 02:35:42 PM
It's more than interesting - you have almost 10% of the market cap trading every day as funds try to cram into the stock to vote this clown out....
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 09, 2012, 01:19:26 PM
I bought my leaps on Thursday and am sitting pretty. With the volume I think bmichaud is correct. Everyone is buying at $7 to kick Ward out and sell at $10 - $12. Everyone wins around $12 except for perhaps Ward who has a high basis and loses the perks. Its worth much more fully developed, but he will have a hard time convincing shareholders to wait.

Someone like Exxon or Shell could develop the entire Miss from cash flow and really enjoy the 40% IRR, not including oil price increases, gas price increases, and enhanced oil recover. Its a still for anyone with excess cash flow / a lower cost of capital.
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on December 09, 2012, 02:44:07 PM



http://seekingalpha.com/article/1053681-what-does-fairfax-s-prem-watsa-see-in-sandridge-energy-s-management?source=email_rt_article_readmore&ifp=0
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 09, 2012, 03:12:35 PM
Good article, this is one of the things I wonder.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 10, 2012, 07:32:02 PM
muscle I dont see how you make money on that one. You would lose on the shares you had, or on the short position. Everyone is in this game to make money, evil is just a buy product of that greater cause inmo  :)

I was on the trip so I couldn't reply until now.
I think there is actually a way to make money on both long and short side, and it will be much more than buy and hold and vote for the solicitation, as I explained above. Since you look to be confused, let me explain again. Please let me know if you do not think this is doable.

If I had a lot of money to play with, I would buy all the way up before Dec. 13th, as long as it is below some price like $8. Preferrably I have already allied with some other folks and we together have more than 50% of the shares to control the outcome of the solicitation.

Then on Dec. 13th, the stock price must have already been high enough to book profits on the long side. We would vote against the solicitation, book profits on the long positions on the Dec. 14th, and then go short. Let's say on Dec 13th, the price is already $11.5, then going short would have really limited risk because the price will be capped at $12. And then the news comes out that the solicitation is not agreed, and stock price would crash, and we book profits on the short side.

This would be my strategy if I had enough money to play this. Unfortunately I don't have that much money so I choose to just get out as it comes close to Dec. 13th.

I think it will be interesting to track short positions on IB. Just be aware if someone has already allied with TW and playing this strategy.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 10, 2012, 08:29:37 PM
It would be difficult to liquidate a 10% position at a gain and then start a massive short inmo within a few days. I think most of the larger guys will get trapped as they buy up to vote either way.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 10, 2012, 09:22:49 PM
It would be difficult to liquidate a 10% position at a gain and then start a massive short inmo within a few days. I think most of the larger guys will get tapped as they buy up to vote either way.

Hmm... Yeah that sounds true. Is it possible to do this through options?
For example, buying stocks low, all the way up to Dec. 13th, vote no, buy put options and sell the shares? If price is trending up steadily, put options will be extremely cheap to buy.

Anyway, I think you are probably right that the larger folks will just buy and vote yes.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 10, 2012, 09:43:23 PM
Trapped- is what I meant. I think liquidity becomes a big problem for the big boys.

If I was TPG I wouldnt have risked millions without having everything already worked out. I would have already talked to the Majors, Foreign Oil Companies, and Independents and would have a few buyers lined up to pay $10 - $12 to steal SD's assets. I would have deals worked out for each of the 4 major assets, and would have a few buyers for the whole company. I would also have enough friends with deep pockets to buy up at least 50% of all shares.

If I was Tom Ward, I would be talking to my lawyers about the options to block this, and would be looking for a white knight. I would talk to Prem, then realize there is no way I will get 50% of the vote unless I too have friends with deep pockets. I would think realistically and realize its in no shareholders interest for me to run the company this way except for me of course. I would then find a buddy who runs a bigger company to buy SD, so I can save face and perhaps still run SD under the new guy.

Both guys are much smarter then me, but thats what I would have done / have been doing over the last few weeks. Its also what the volume and option market suggests. The only real variable is who will win first and how long will it take. Its fun to watch though.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 11, 2012, 06:09:51 AM
Trapped- is what I meant. I think liquidity becomes a big problem for the big boys.

If I was TPG I wouldnt have risked millions without having everything already worked out. I would have already talked to the Majors, Foreign Oil Companies, and Independents and would have a few buyers lined up to pay $10 - $12 to steal SD's assets. I would have deals worked out for each of the 4 major assets, and would have a few buyers for the whole company. I would also have enough friends with deep pockets to buy up at least 50% of all shares.

If I was Tom Ward, I would be talking to my lawyers about the options to block this, and would be looking for a white knight. I would talk to Prem, then realize there is no way I will get 50% of the vote unless I too have friends with deep pockets. I would think realistically and realize its in no shareholders interest for me to run the company this way except for me of course. I would then find a buddy who runs a bigger company to buy SD, so I can save face and perhaps still run SD under the new guy.

Both guys are much smarter then me, but thats what I would have done / have been doing over the last few weeks. Its also what the volume and option market suggests. The only real variable is who will win first and how long will it take. Its fun to watch though.


Yeah. I was concerned who will eventually win, and decided to just get out because the risk/reward doesn't seem that great.

You specialize in Oil and Gas? What's your thoughts on CHK? That one has already changed the board, so if the upside is similar, then probably risk/reward is better?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 11, 2012, 03:41:25 PM
Specialize isnt the right word. For some reason I am drawn to the sector but I have a lot to learn. I have picked the 2 biggest losers in the sector (ATPG and SD) so that speaks volumes about my "expertise", lol.

CHK is similar to SD inmo, but far more complex, much bigger, and with more moving parts. SD only has had 2-4 major assets which were pretty straightforward. CHK is at the turn, while SD is beginning. In a perfect world there would be a buyout, and I could take a small portion of the cash and cycle it into CHK. I would invest a small portion till I grew to understand CHK as well as I do SD. If you understand the Miss, Perm, and Shallow Gulf you understand SD.

CHK has many more regions and areas, and alot of them are gas related properties which I am not too excited about.

---

Upside perhaps similar, SD has a very hard catalyst and could be sorted in 3 months or so.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 11, 2012, 08:56:12 PM
Specialize isnt the right word. For some reason I am drawn to the sector but I have a lot to learn. I have picked the 2 biggest losers in the sector (ATPG and SD) so that speaks volumes about my "expertise", lol.

CHK is similar to SD inmo, but far more complex, much bigger, and with more moving parts. SD only has had 2-4 major assets which were pretty straightforward. CHK is at the turn, while SD is beginning. In a perfect world there would be a buyout, and I could take a small portion of the cash and cycle it into CHK. I would invest a small portion till I grew to understand CHK as well as I do SD. If you understand the Miss, Perm, and Shallow Gulf you understand SD.

CHK has many more regions and areas, and alot of them are gas related properties which I am not too excited about.

---

Upside perhaps similar, SD has a very hard catalyst and could be sorted in 3 months or so.


Is it really possible to truly understand the assets? I got burned with ATPGP, and I thought I could understand the assets they own in GOM. It later turned out that there is no way to understand those assets because all the important well data is confidential.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 11, 2012, 09:13:42 PM
I think you can get comfortable with the assets. ATPG was interesting, they were buying assets basically nobody else wanted, and drilling in deep water with no real cash flow to support it. Offshore / shallow water is a bit easier, especially with the many private transactions you can use to support the valuations. You have 8 companies getting great returns in the miss, companies paying $4k an acre in JVs, ect. to use as a valuation benchmark, ect.
Title: Re: SD - SandRidge Energy
Post by: T-bone1 on December 11, 2012, 09:40:16 PM
Well results are all over the place in the Miss Lime and operators are basically betting that they can drill enough 1,000 boe IP wells to offset the money losers.  I believe Tom Ward himself has described it as "crappy rock".

The Miss Lime is not a shale, which means its is much less uniform geographically.  This means there aren't large well defined sweet spots like there are in the Marcellus or Eagleford.  I believe the play makes economic sense in the areas where there has historically been good vertical production like Woods and Alfalfa, but I'm not sure the other areas are working out so well.  The "type curve" is something of a joke in this play because there are few average wells.  The "type curve" is an estimation of what all the wells look like when averaged together - Sandridge had to move their type curve down because they were getting more crappy wells.

It is difficult to put a value on a lot of the Miss acreage, although the play in total seems to be working.  Considering CHK also is trying to sell a large chunk of acreage in the play (perhaps a million acres), I don't think buyers will be pounding down SD's door.  That being said, I agree with the activists that the stock is likely worth $10+.

I'm not sure how this plays out from here.  SD is cheap and Tom has built some value here, but using the Dynamic acquisition as a backdoor equity offering and then selling the Permian doesn't leave me with a lot of confidence in management.  SD has been aggressively leasing acreage in the Miss for high prices when they can't afford to develop what they have.  Some people assume Tom was the conservative one at CHK, but I'm not so sure.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 12, 2012, 02:24:11 PM
            Anyone has any thought about SD's trading volumes for the past few days?

I mean: the trading volumes were high on Dec.6th, 7th and 10th. On 11th and 12th, the volumes come down.  Originally, when the volumes went higher on 6th,7th and 10th. I thought that everyone was grabbing shares for the Dec. 13th deadline.

             But now the volumes have come down fr yesterday and today with price also down. It seems that either TPG and its allies already got enough shares or TPG and its allies know that they would not have enough shares and stopped their buying..

              My guess is the latter?!
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 12, 2012, 02:36:11 PM
Perhaps it has something to do with settlement date vs. trade date, that's my guess...
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 12, 2012, 02:44:44 PM
Perhaps it has something to do with settlement date vs. trade date, that's my guess...

That would've been my explanation.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 12, 2012, 02:51:48 PM
Perhaps it has something to do with settlement date vs. trade date, that's my guess...

That would've been my explanation.
Thanks, Myth and BM...
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 12, 2012, 04:29:26 PM
I think Myth was spot on earlier when he said that it's likely TPG had things locked up on the vote even before proceeding. With TPG's resources, why not?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 12, 2012, 05:29:08 PM
I cant wait to see the 5% fillings, they are due within a few days of trading I believe.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 12, 2012, 07:33:07 PM
did u guys vote?
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on December 12, 2012, 07:37:16 PM
Have you received the proxy in the mail already?

did u guys vote?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 12, 2012, 07:42:20 PM
Have you received the proxy in the mail already?

did u guys vote?

I live in Canada, those will take couple weeks to come.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 12, 2012, 09:10:59 PM
Have you received the proxy in the mail already?

did u guys vote?

I live in Canada, those will take couple weeks to come.

So when will the outcome be determined? Probably in 1 month?
Title: Re: SD - SandRidge Energy
Post by: ASTA on December 13, 2012, 04:00:40 AM
Nice short article on SD in ft.com/lex if anyone is interested.
Talking about TPG-Axon and how SD management and SD should be radically changed. 
Title: Re: SD - SandRidge Energy
Post by: ItsAValueTrap on December 13, 2012, 01:07:37 PM
Quote
It later turned out that there is no way to understand those assets because all the important well data is confidential.
I would agree... a lot of resource stocks are simply too hard.  When these companies sell assets to private buyers, they will often open up a data room for the private companies to do due diligence.

Oil & gas companies could release more information on things like expected decline curves, volumetric estimates, estimates based on pressure, etc. etc.  Without that type of information, you haven't really done your due diligence.  The other approach is to only work with ethical managements (SD is not one of them) who are also in the top percentile in terms of running a company.

*I made money shorting ATPG.  They lied repeatedly in the past, insiders were selling, and they had negative operating cash flow... it was a really obvious short.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 13, 2012, 02:41:03 PM
ItsAValueTrap let me know about your next short.
In retrospect it was the famous story stock that over promised, under delivered, was over levered, and never faced reality. It was a bit obvious.

Hopefully TPG comes through on this one. I plan on holding. I think the assets have value.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 13, 2012, 05:50:52 PM
ItsAValueTrap let me know about your next short.
In retrospect it was the famous story stock that over promised, under delivered, was over levered, and never faced reality. It was a bit obvious.

Hopefully TPG comes through on this one. I plan on holding. I think the assets have value.

What I care about is when the solicitation result will be out? I bought some $6 call options for next June.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 13, 2012, 06:29:51 PM
As did I ...

I cant imagine this going on for longer then a month or so, though.
Title: Re: SD - SandRidge Energy
Post by: ItsAValueTrap on December 13, 2012, 07:45:58 PM
ItsAValueTrap let me know about your next short.

Read my signature lol...  I covered my JCP short at a nice profit, still have open short positions on JOE and PRXI (underwater on both... :(   ).

As far as Sandridge Energy goes, I never really researched it.  17.9% of the float is short according to Yahoo Finance... the most flawed stocks around tend to attract high short interest.  As a long investment, SD would automatically go into the too hard pile due to the following red flags:
- negative cash flow
- constant equity issuance
- it doesn't make sense for investors for there to be so many sandridge companies.  The pure play sandridge companies are handcuffed into their own sector... this is an unnecessary obstacle to intelligent asset allocation.

It might be a good short... but it's not like I am shorting it or have researched the company enough.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 13, 2012, 08:08:33 PM
I like the tag line and thanks for your thoughts. TPG saved my bacon here, and I will heed your red flats and add them to my list.

Title: Re: SD - SandRidge Energy
Post by: muscleman on December 14, 2012, 06:20:12 PM
ItsAValueTrap let me know about your next short.

Read my signature lol...  I covered my JCP short at a nice profit, still have open short positions on JOE and PRXI (underwater on both... :(   ).

As far as Sandridge Energy goes, I never really researched it.  17.9% of the float is short according to Yahoo Finance... the most flawed stocks around tend to attract high short interest.  As a long investment, SD would automatically go into the too hard pile due to the following red flags:
- negative cash flow
- constant equity issuance
- it doesn't make sense for investors for there to be so many sandridge companies.  The pure play sandridge companies are handcuffed into their own sector... this is an unnecessary obstacle to intelligent asset allocation.

It might be a good short... but it's not like I am shorting it or have researched the company enough.

I think for shorts, timing is way more important than pure long investors.
Shorting merely based on fundamentals with no hard and clear catalyst is not likely to be as profitable as longs. Have you checked some technical analysis books like the ones from Wyckoff? Before I came to fundamental analysis, I was pure TA. I read through almost everything about TA and I think wyckoff's volume analysis is the only one that makes sense. Combining this with your fundamentals will probably work out better.
Title: Re: SD - SandRidge Energy
Post by: ItsAValueTrap on December 14, 2012, 07:09:40 PM
Well shorting, in my opinion, is a whole art onto itself.  When you start doing it, you start learning about things the hard way... e.g. buy-ins, borrowing costs, short squeezes, crazy stuff like Volkswagen (I have no position in that), etc.  Shorting common stock may not really be worth your time.

I am generally skeptical about technical analysis.  Some of it probably even works (e.g. anything that takes advantage of excess volatility / Mr. Market, some of the stuff which take advantage of stop losses, etc.).  But I guess I'm more interested in how the world works and in fundamentals... and I'm turned off by TA witchcraft. 

As far as my performance... I made all my money shorting and lost what I made on my longs (I loaded the boat on QXM/XING and got burned because the CEO ran off with the money).

Anyways this is getting off topic...
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 15, 2012, 04:49:28 AM
Well shorting, in my opinion, is a whole art onto itself.  When you start doing it, you start learning about things the hard way... e.g. buy-ins, borrowing costs, short squeezes, crazy stuff like Volkswagen (I have no position in that), etc.  Shorting common stock may not really be worth your time.

I am generally skeptical about technical analysis.  Some of it probably even works (e.g. anything that takes advantage of excess volatility / Mr. Market, some of the stuff which take advantage of stop losses, etc.).  But I guess I'm more interested in how the world works and in fundamentals... and I'm turned off by TA witchcraft. 

As far as my performance... I made all my money shorting and lost what I made on my longs (I loaded the boat on QXM/XING and got burned because the CEO ran off with the money).

Anyways this is getting off topic...

sigh. I lost a lot of money on CCME too. I even did some DD and found that they have the operations. But still, the scale of fraud is out of my imagination.
I never want to buy one more US listed Chinese stock.

What longs do you have now? I am sticking with only solid management now. If management is questionable, I will just pass. I learned the lesson the hard way through ATPG and CCME, and, to some extent, SD, which I think still has hope of making a buck.
Title: Re: SD - SandRidge Energy
Post by: ItsAValueTrap on December 15, 2012, 11:08:56 PM
With CCME there were some reports by short sellers alleging fraud before the stock price collapsed.  Unfortunately I did not find such reports for QXM/XING (though in hindsight I really should have researched Real Gold, as there are reports of fake mines there).

Quote
What longs do you have now?
Check my blog... http://glennchan.wordpress.com/

I'm still unsure if owning junior miners is a good idea... I own Noront and KWG.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 19, 2012, 01:21:30 PM
SD sold Permian basin asset for 2.6 Billion
http://finance.yahoo.com/news/sandridge-energy-inc-agrees-sell-211200500.html (http://finance.yahoo.com/news/sandridge-energy-inc-agrees-sell-211200500.html)
Quote
SandRidge Energy, Inc. (SD) today announced that it has signed a definitive agreement to sell its Permian Basin properties to Sheridan Production Partners II, a privately held Houston-based oil and gas company, for $2.6 billion in cash.  SandRidge announced on November 8 that it was exploring the sale of the assets.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 19, 2012, 01:22:37 PM
I was just about to post that. Will be interesting to see what TPG says about the pricing.
We have catalysts all around for this one.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 19, 2012, 01:29:54 PM
I was just about to post that. Will be interesting to see what TPG says about the pricing.
We have catalysts all around for this one.
Myth,

         Not knowing all the details of exactly what was sold, but TPG was valuing Permian for 1.5B....
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 19, 2012, 01:47:47 PM
Thanks Zippy, hard to process this while at work. Looks like we have 1.3 billion net debt, and also will get the rigs, personal, and focus all pushed back into the Miss.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 19, 2012, 02:00:16 PM
now, they should sell their GOM and remaining assets to simplify the company. They don't need GOM's cash flow anymore.

EV 6.7b
-Permain 2.6b
-GOM 1.5b
-Trust value 0.5b

When the market see they are only paying ~2billion for whole Miss play. this will get valued properly.


Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 19, 2012, 02:10:25 PM
You are forgetting the WTO.

I wish we never bought the GOM and had just sold the Permian (as suggested ages ago). Ward has come around, but is late to the party. I would have prefered tuck in Gulf assets at 2x cash flow, WTO, and Miss Lime.

Eventually unload Gulf at 4-5x cash flow when possible. The oil price in the gulf is nice though.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 19, 2012, 02:34:38 PM
You are forgetting the WTO.

I wish we never bought the GOM and had just sold the Permian (as suggested ages ago). Ward has come around, but is late to the party. I would have prefered tuck in Gulf assets at 2x cash flow, WTO, and Miss Lime.

Eventually unload Gulf at 4-5x cash flow when possible. The oil price in the gulf is nice though.

i would be happy if they get rid of GOM asset now and do a buyback.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 19, 2012, 02:35:58 PM
Stock went back up above $7 in afterhour trading...
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 19, 2012, 06:58:41 PM
Stock went back up above $7 in afterhour trading...

That's weak
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 19, 2012, 07:37:19 PM
I dont expect much but the story is getting simpler. The real money comes with change of Management, Miss Sale, or Sale of company. Just enjoy the ride and the fact that we have catalysts.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 20, 2012, 04:08:35 AM
Stock went back up above $7 in afterhour trading...

That's weak
Actually, I am not sure how big a pop to expect.  What should be expected?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 06:25:01 AM
Stock went back up above $7 in afterhour trading...

That's weak
Actually, I am not sure how big a pop to expect.  What should be expected?

looks like the market doesn't like the deal
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on December 20, 2012, 06:36:45 AM
I would like to hear TPG comments regarding this sale - they after all are the catalyst for this sale.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 20, 2012, 07:25:35 AM
I would like to hear TPG comments regarding this sale - they after all are the catalyst for this sale.

They actually were not the catalyst - they announced they were pursuing the sale on Nov 8th, the same day TPG's first letter came out...

http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1756565&highlight=




This is a very disappointing result. Change needs to happen and fast....
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 12:58:00 PM
the deal actually puts SD back into NG play.
This move might mean TW is at least us slightly more bullish on gas than oil.
The GOM assets got to go next.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 20, 2012, 01:30:49 PM
Alert Tom Ward is just flopping around trying to hold on to his company, nothing more nothing less.

I agree with TPG.

The stock is down because the analyst cant figure out the strategy or the value of the Miss. Ward spent the last 3 years changing the strategy every 6 months. He also spent years billing the Miss as the best oil and gas place in the states based on IRR. The last call or two saw severe changes in strategy and a cutting of the Miss IRR from 90% to 45%.

45% is decent but who is to say thats valid. The market has no faith in the Miss value or in Management. Miss acre should be sold to firm up the value and Management must go. The market will keep the shares in the 6s until one or both of those happen. I think Mr. Market has this one right, on the bight side I dont see how Prem or anyone else votes with Management. Thats a vote for dead money for 3 years while they rebuild faith.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 02:07:51 PM
We will see. They underestimated Permian for 1.1 billion.

50% ROR still comparable to some of the best field and we are not paying anywhere close to Bakken.

I am debating on quick buyout vs. long term value creation... A buyout can get us 10 bucks , vs. a home run if Tom stays the course for next couple years. The problem is nobody else is getting the scale in Miss (CHK has more acres but they only have 9 rigs there)...so we won't get many comparable transactions.

CHK is looking to JV or a sale on theirs (2mm acres), maybe TW will get involved somehow which makes perfect sense. Sell Permian, Sell GOM, do a JV with CHK's and get much large scale right away.

I hope at least TPG can replace the BOD to put some checks in place, this is not a private company after all.



Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 02:11:19 PM
Alert Tom Ward is just flopping around trying to hold on to his company, nothing more nothing less.

I agree with TPG.

The stock is down because the analyst cant figure out the strategy or the value of the Miss. Ward spent the last 3 years changing the strategy every 6 months. He also spent years billing the Miss as the best oil and gas place in the states based on IRR. The last call or two saw severe changes in strategy and a cutting of the Miss IRR from 90% to 45%.

45% is decent but who is to say thats valid. The market has no faith in the Miss value or in Management. Miss acre should be sold to firm up the value and Management must go. The market will keep the shares in the 6s until one or both of those happen. I think Mr. Market has this one right, on the bight side I dont see how Prem or anyone else votes with Management. Thats a vote for dead money for 3 years while they rebuild faith.

Does FFH hold whole bunch of pfd, those 8% incoming stream may make Prem happy to wait it out?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 20, 2012, 02:19:38 PM
Ya he is happy to wait due to preferreds but as TPG has said, no company can afford to spent what SD is spending on benefits and G&A and build shareholder value. Prem also needs the market to value SD accordingly to do well.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 20, 2012, 02:39:23 PM
Ya he is happy to wait due to preferreds but as TPG has said, no company can afford to spent what SD is spending on benefits and G&A and build shareholder value. Prem also needs the market to value SD accordingly to do well.
It seems that what is going on here is what was going on at CHK earlier. If Tom Ward is right to move to gap from oil, would it be better to sell out SD with a modest gain and buy CHK?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 20, 2012, 03:25:55 PM
Perhaps but TPG might be able to sell SD for $9 to $10 a share, which would generate a fine gain in 3-6 months. One can take that and then buy CHK or any number of oil companies.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 03:35:07 PM
Ya he is happy to wait due to preferreds but as TPG has said, no company can afford to spent what SD is spending on benefits and G&A and build shareholder value. Prem also needs the market to value SD accordingly to do well.

Yes, I agree that we need to change the BOD & management to put the benefits and G&A in checks, but not sure if I want a quick buyout for 9 bucks.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 03:36:55 PM
Ya he is happy to wait due to preferreds but as TPG has said, no company can afford to spent what SD is spending on benefits and G&A and build shareholder value. Prem also needs the market to value SD accordingly to do well.
It seems that what is going on here is what was going on at CHK earlier. If Tom Ward is right to move to gap from oil, would it be better to sell out SD with a modest gain and buy CHK?

Both are cheap. CHK has different problems and opportunities. It's still heavily leveraged to NG pricing.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 20, 2012, 03:42:35 PM
btw, do you guys find it odd that SD was able to put together this deal so quick? Make me wonder if they actually get the best value from it.

This could be partly because TW, as mentioned by Myth, urgently put this together to avoid being kicked out... now the pps comes down after the sale, TW's day is numbered?!
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 20, 2012, 04:08:37 PM
The deal was pretty much worked out before it was announced. That is how TW does things. I think he got a fair price, but the company cant afford its G&A nor its senior management costs. We also cant develop almost 2 million acres.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 21, 2012, 03:08:33 PM
Repsol presentation on the SD JV:

http://www.repsol.com/imagenes/es_en/Presentacion_EurotekSandRidge_tcm11-617660.pdf

Find it interesting that the SD JV is Repsol's only U.S. exposure....




Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 23, 2012, 12:47:43 PM
Some articles on the Miss Lime - if estimates are to be believed, perhaps there is a method to Ward's madness....


http://www.kansascity.com/2012/12/16/3968169/mississippi-lime-formation-could.html

http://www.ogj.com/articles/2012/08/mississippi-lime-play-sprawls-northward-into-nebraska.html

http://www.marketintelligencecenter.com/articles/251069

http://www.tughilloperating.com/wp-content/uploads/2012/11/1012-Tug-Hill_Eprint.pdf



Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 23, 2012, 02:07:09 PM
Some articles on the Miss Lime - if estimates are to be believed, perhaps there is a method to Ward's madness....


http://www.kansascity.com/2012/12/16/3968169/mississippi-lime-formation-could.html

http://www.ogj.com/articles/2012/08/mississippi-lime-play-sprawls-northward-into-nebraska.html

http://www.marketintelligencecenter.com/articles/251069

http://www.tughilloperating.com/wp-content/uploads/2012/11/1012-Tug-Hill_Eprint.pdf

Thank you for posting these.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 24, 2012, 05:51:43 AM
According to NewsOK, the sandridge vote is underway.  Anyone has received notification on voting?
Quote
SandRidge vote under way, company says

SandRidge Energy Inc. shareholders will decide over the next two months if they want a leadership change at the Oklahoma City oil company.
The future of SandRidge Energy Inc. is in the hands of its shareholders.
 
SandRidge shareholders must decide if they want the company to continue under the stewardship of CEO Tom Ward and his team or turn it over to new management, as sought by investment firm TPG-Axon Capital.
http://newsok.com/sandridge-vote-under-way-company-says/article/3739680 (http://newsok.com/sandridge-vote-under-way-company-says/article/3739680)
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on December 24, 2012, 06:21:07 AM
Not yet and I hope everyone is voting for leadership change.  I would love to sell out of this investment to allocate the capital to Markel (especially as it is almost at book) but it is too tempting for a potential double from here...

According to NewsOK, the sandridge vote is underway.  Anyone has received notification on voting?
Quote
SandRidge vote under way, company says

SandRidge Energy Inc. shareholders will decide over the next two months if they want a leadership change at the Oklahoma City oil company.
The future of SandRidge Energy Inc. is in the hands of its shareholders.
 
SandRidge shareholders must decide if they want the company to continue under the stewardship of CEO Tom Ward and his team or turn it over to new management, as sought by investment firm TPG-Axon Capital.
http://newsok.com/sandridge-vote-under-way-company-says/article/3739680 (http://newsok.com/sandridge-vote-under-way-company-says/article/3739680)
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on December 24, 2012, 10:15:48 AM
TPG sends a third letter to the BOD...

http://www.fortmilltimes.com/2012/12/24/2402551/tpg-axon-sends-third-letter-to.html

Quote
In the latest letter, TPG-Axon notes that it has filed a lawsuit in Delaware Chancery Court contesting the validity of the declared Initial Consent Date noted in SandRidge’s 8-K, dated December 21, 2012, relating to TPG-Axon’s proposals to amend the Company’s bylaws and remove and replace members of the current Board of Directors.

TPG-Axon also stated that it plans to file consent solicitation documents with the U.S. Securities and Exchange Commission (the “SEC”) today. TPG-Axon is seeking to replace SandRidge’s entire Board of Directors with a slate of directors that are highly qualified, of high integrity, and driven by shareholder interest. After TPG-Axon’s consent solicitation is mailed to SandRidge shareholders in early January, SandRidge shareholders of record as of December 13, 2012 will have up to 60 days to submit their written consent for TPG-Axon’s proposals.
Title: Re: SD - SandRidge Energy
Post by: Grenville on December 24, 2012, 10:55:06 AM
Here's a link to the third letter.

http://www.shareholdersforsandridge.com/wp-content/uploads/2012/12/Third_Letter_To_SandRidge_12_24_12.pdf (http://www.shareholdersforsandridge.com/wp-content/uploads/2012/12/Third_Letter_To_SandRidge_12_24_12.pdf)

I hope a lot of what they are saying about Ward isn't true. If it is, I wouldn't be too happy as an owner.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 24, 2012, 11:57:09 AM
Originally, we have untill mid-Feb to vote.  Does anyone know what Tom Ward wants to change the date to?
If Tom is doing such things, how can "Fairfax" with Fair in its name support such behavior? I am asking this question as I do own some Fairfax shares.

Quote
Now, the company attempts to shorten the period of time in which shareholders have to vote, claiming it has received consents in our solicitation - which is impossible as we have yet to even request them! These are all just additional examples of Tom Ward and the Board of Directors’ utter disregard for shareholder interests.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on December 24, 2012, 12:30:23 PM
http://www.bloomberg.com/news/2012-12-24/tpg-axon-accuses-sandridge-ceo-ward-and-son-of-impropriety-1-.html


TPG-Axon Capital Management LP, owner of 6.7 percent of SandRidge Energy Inc. (SD)’s outstanding shares, requested the company’s board investigate whether Chief Executive Officer Tom Ward and his son acted improperly with regard to acquiring mineral rights.

Ward and his son, Trent Ward, acquired mineral rights from third parties and then leased those rights to Oklahoma City- based SandRidge “just weeks or months later” for profit, TPG- Axon said in a letter sent to the company’s board today. Greg Dewey, a spokesman for SandRidge, did not immediately respond to messages seeking comment.

“It is our understanding that Mr. Ward and his son, Trent Ward, actively compete with the company, and in addition, have also engaged in repeated transactions in which they ‘front-run’ the company,” Dinakar Singh, chief executive officer of TPG- Axon, wrote in the letter.

SandRidge has disclosed several transactions with Ward in its annual federal filing in March, including that it bought a working interest in leases from WCT Resources LLC, which is owned by trusts that are for the benefit of the CEO’s children.

TPG-Axon sued Sandridge and its directors today in Delaware Chancery Court in Wilmington, asking a judge to stop any interference by Sandridge and to extend the start of the 60-day period of consent solicitation.

TPG-Axon has previously called for a shareholder vote on replacing SandRidge’s board of directors.

Ward founded SandRidge after leaving Chesapeake Energy Corp. (CHK) in 2006 and owns 5.2 percent of the company’s shares, according to data compiled by Bloomberg.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 25, 2012, 06:06:36 AM
What a story, wonder if Prem knows about this.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 25, 2012, 04:02:49 PM
What a story, wonder if Prem knows about this.

I knew TW won't easily give up the fight. Well at least I took the December 6th to 10th ride out of most of the long position, so I am just watching the drama going on now.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 26, 2012, 04:14:26 AM
The PREC14A is out
http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MjQ0NzkmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d (http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MjQ0NzkmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d)
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 26, 2012, 07:50:25 AM
The PREC14A is out
http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MjQ0NzkmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d (http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MjQ0NzkmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d)
From PREC14A, page 29, page 30 and page 31, I just noticed that on the day of Dec. 10th, TPG actually sold 1.6 million share in total after the stock price rose. I wonder whether this means that they were just agitating to unload or they already had enough votes?
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 26, 2012, 03:49:50 PM
Assuming 490mm total shares out and TPG's 6.5% ownership, TPG owns ~32mm shares - so a 1.6mm sale is around 5% of their stake and 33bps of total SD s/o....
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on December 26, 2012, 07:06:45 PM
http://www.sec.gov/Archives/edgar/data/1349436/000090266412001616/p12-1980sc13da.htm

New SC 13D/A filed by TPG. 33 million shares 6.7%
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on December 27, 2012, 09:02:10 AM
http://dealbook.nytimes.com/2012/12/26/hedge-fund-seeks-ouster-of-sandridge-energys-board/ (http://dealbook.nytimes.com/2012/12/26/hedge-fund-seeks-ouster-of-sandridge-energys-board/)

Hedge Fund Seeks Ouster of SandRidge Energy’s Board


A New York hedge fund filed papers with federal securities regulators on Wednesday seeking to oust the board at SandRidge Energy, the latest salvo in its continuing campaign against the struggling Oklahoma City oil and gas company.

The hedge fund, TPG-Axon Capital Management, which owns nearly 7 percent of SandRidge’s shares, submitted so-called consent solicitation documents with the Securities and Exchange Commission, offering up its own slate of directors to replace the current board.

SandRidge has come under pressure by TPG-Axon and another large hedge fund, Mount Kellett Capital Management, which have attacked the company over what they called an onerous debt load, reckless spending and incoherent business strategy.

TPG-Axon’s securities filing came two days after it sent a blistering letter to SandRidge’s board, demanding that it investigate whether Tom L. Ward, SandRidge’s chief executive, and his son had engaged in self-dealing and had directly competed with the company.

“It is our understanding that Mr. Ward and his son, Trent Ward, actively compete with the company, and in addition, have also engaged in repeated transactions in which they ‘front-run’ the company,” Dinakar Singh, chief executive of TPG-Axon, wrote in the letter. “It is astonishing that the C.E.O. of a company would engage in behavior that directly competes with his shareholders’ interests for his own personal benefit.”

The letter accuses the Wards of acquiring mineral rights and then leasing those rights to SandRidge for a profit. In securities filings this year, SandRidge said it had bought interests in mineral rights from an entity owned by Ward family trusts.

A spokesman for SandRidge, Greg Dewey, did not return telephone calls seeking comment.

SandRidge’s shares are down more than 75 percent since its 2007 initial public offering and more than 90 percent since its peak in June 2008. The stock was flat in Wednesday’s session, closing at $6.26.

TPG-Axon’s S.E.C. filing was made in conjunction with a lawsuit filed on Monday in the Delaware Court of Chancery. The lawsuit challenges a move by SandRidge to shorten the time that shareholders have to vote on changing the company’s bylaws and replacing the board with TPG-Axon’s slate.

“Sadly, we are not surprised that Tom Ward and the board of directors have resorted to shameful tricks to try and confuse shareholders and shorten the period of time in which they have to vote,” Mr. Singh said in a statement. “The actions Tom and the board have taken over the past several weeks reek of desperation and clearly illustrate their complete disregard for shareholder interests and transparency.”

The solicitation by TPG-Axon will be sent in early January to SandRidge shareholders, who would then have up to 60 days to consent to the fund’s proposal to elect a new board, which would include Mr. Singh.

Much of TPG-Axon’s criticism has been aimed at Mr. Ward. Mr. Ward started SandRidge in 2006 after leaving Chesapeake Energy, a much larger Oklahoma oil-and-gas concern that he co-founded and has had its own share of corporate governance issues in recent years. He is a part-owner of the Oklahoma City Thunder professional basketball franchise along with Aubrey McClendon, a co-founder of Chesapeake and its chief executive.

Mr. Ward’s total compensation in 2011 was $25 million, representing about half of the company’s earnings that year. SandRidge bestows numerous perks upon Mr. Ward, including the unlimited use of the company’s four corporate jets.

Title: Re: SD - SandRidge Energy
Post by: gordoffh on December 27, 2012, 02:16:27 PM
Yahoo board saying that Fairfax bought approx 5mil shares of Sd dec 21 at around 6 .21 . Trying to find a release but can,t. Anybody else see this?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 27, 2012, 02:19:20 PM
http://www.sec.gov/Archives/edgar/data/915191/000118143112067258/xslF345X03/rrd364793.xml

As I said SD is in play, something is going on behind the scenes. My guess is Ward will sell to a friendly party.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on December 27, 2012, 02:28:16 PM
Thanks.   I had a sell in that got filled late in the afternoon. Have been flipping a small portion of shares lately to take part in the volatility. Still have a boatload with average around the high 7's. This was purchase was nice to see.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on December 27, 2012, 02:39:10 PM
Thanks.   I had a sell in that got filled late in the afternoon. Have been flipping a small portion of shares lately to take part in the volatility. Still have a boatload with average around the high 7's. This was purchase was nice to see.

Myth - are you suggesting FFH will take control of SD? Interesting thought....

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 27, 2012, 02:47:33 PM
Sandridge management now files their own 14A
Quote
http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=IROL-secToc&TOC=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9vdXRsaW5lLnhtbD9yZXBvPXRlbmsmaXBhZ2U9ODYyODExNQ%3d%3d&ListAll=1
The compensation does look out of whack; when compared to what the management did for (or to) the shareholders.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on December 27, 2012, 02:52:38 PM
What a story, wonder if Prem knows about this.


A comment in an earlier post re TPG' s allegations with respect to Ward's management of SD. I assume from today,s report of additional buying that if they are they are not concerned.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on December 27, 2012, 03:12:26 PM
Personally I am happy there was a margin of safety. Between the miss IRR going down to mid 40s from mid 80s due to more gas and less oil, the Permian being sold for a bit less than PV10, the DOR purchase at PV10, lawsuits, and the letters regarding high G&A, front running, and other improprieties I am starting to worry about a return of capital and not a return on capital

While Prem is paid to wait, he has to be wondering as well. I dont think he will take over SD, but cant see why he would stick with Ward when he would never do these things to his shareholders. I dont see how one reads the 3 letters, and then reads SD's response, and still votes for current management.

Cost of capital, G&A, and inefficiencies matter when IRRs are going down and are in the 30 - 40 range. I dont see how Ward wins this, and I believe he could actually be terminated with cause which takes away the change of control payoff. If I were him I would be talking to lawyers, and would be looking for a buyer around $9 - $11. Its a big windfall for him, worth at least $100 million in pay / stock. Its under his basis, but its that or get kicked out, embarrassed, and get nothing if they can figure out a way to terminate you with cause.

The miss has value for any oil and gas company with scale and a low cost of capital. But it cant cover up for all of the issues at SD. I dont know if SD can drill it properly with the G&A and cost of capital. The CHK model of overspending is broken. Its getting to the point where its in everyones best interest for the company to be sold at $10 a share. That would be a decent windfall for me to compensate for the all the headaches this investment has caused lol.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on December 27, 2012, 03:34:43 PM
bb screen
Title: Re: SD - SandRidge Energy
Post by: zippy1 on December 28, 2012, 03:16:04 AM
bb screen
I presume Prem will vote with Tom Ward while TPG will vote against.  What about the other big buyer? Hopefully, this will get the cost structure of SD to be reasonable.
Title: Re: SD - SandRidge Energy
Post by: muscleman on December 29, 2012, 11:51:25 AM
Personally I am happy there was a margin of safety. Between the miss IRR going down to mid 40s from mid 80s due to more gas and less oil, the Permian being sold for a bit less than PV10, the DOR purchase at PV10, lawsuits, and the letters regarding high G&A, front running, and other improprieties I am starting to worry about a return of capital and not a return on capital

While Prem is paid to wait, he has to be wondering as well. I dont think he will take over SD, but cant see why he would stick with Ward when he would never do these things to his shareholders. I dont see how one reads the 3 letters, and then reads SD's response, and still votes for current management.

Cost of capital, G&A, and inefficiencies matter when IRRs are going down and are in the 30 - 40 range. I dont see how Ward wins this, and I believe he could actually be terminated with cause which takes away the change of control payoff. If I were him I would be talking to lawyers, and would be looking for a buyer around $9 - $11. Its a big windfall for him, worth at least $100 million in pay / stock. Its under his basis, but its that or get kicked out, embarrassed, and get nothing if they can figure out a way to terminate you with cause.

The miss has value for any oil and gas company with scale and a low cost of capital. But it cant cover up for all of the issues at SD. I dont know if SD can drill it properly with the G&A and cost of capital. The CHK model of overspending is broken. Its getting to the point where its in everyones best interest for the company to be sold at $10 a share. That would be a decent windfall for me to compensate for the all the headaches this investment has caused lol.

I am a bit confused about the suit that TPG brought to SD.
SD wants to set the solicitation deadline to be the 19th but TPG said it should be 60 days. So whose word would count in this case for the solicitation?
Title: Re: SD - SandRidge Energy
Post by: gordoffh on December 31, 2012, 03:31:37 PM
Yahoo board is saying Fairfax bought additional 3.7 million shares dec 27/31.
Getting interesting if true
Title: Re: SD - SandRidge Energy
Post by: bmichaud on December 31, 2012, 06:25:39 PM
The Fairfax/SD situation reeks of LUK and JEF. Why not take SD private along with TW? The market cap is peanuts for Fairfax. Certainly would explain recent share purchases....
Title: Re: SD - SandRidge Energy
Post by: plato1976 on December 31, 2012, 06:43:54 PM
Take SD private with TW and continue to pay TW at the current rate ? Not a good idea to me as an FFH shareholder :(

The Fairfax/SD situation reeks of LUK and JEF. Why not take SD private along with TW? The market cap is peanuts for Fairfax. Certainly would explain recent share purchases....
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on December 31, 2012, 07:25:37 PM
Yahoo board is saying Fairfax bought additional 3.7 million shares dec 27/31.
Getting interesting if true

Yes, they did. Not sure what it means as these transactions are after Dec 13..
Title: Re: SD - SandRidge Energy
Post by: benhacker on December 31, 2012, 07:56:55 PM
Quote
The Fairfax/SD situation reeks of LUK and JEF.

BM, can you clarify what you mean here?  How are these situations similar?  Betting on a high paid jockey (?) or something else?

Ben
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on December 31, 2012, 08:06:39 PM
Would you please help me understand how the Market Cap for SD is peanuts?  You have a company with an enterprise value of $6.6B (Once you subtract the permian assets - $2.6B) you are looking at a company with an enterprise value of $4.5-5B. 

The market cap is peanuts for Fairfax. Certainly would explain recent share purchases....
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 01, 2013, 06:46:53 AM
Quote
The Fairfax/SD situation reeks of LUK and JEF.

BM, can you clarify what you mean here?  How are these situations similar?  Betting on a high paid jockey (?) or something else?

Ben

LUK had been a long time shareholder/supporter of JEF before eventually taking it private. My guess is that Fairfax was well aware of the shenanigans going on at SD (how could they not? Tey are a deep-dive firm) and was fine given how much they liked TW. As such, I assume they would prefer to allow TW to run SD under a private umbrella in order to A) avoid quarterly market scrutiny and B) provide cheaper financing. FFH building its stake at these levels makes a takeover that much more attractive as it won't need to tender for shares already owned.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 01, 2013, 06:54:53 AM
Would you please help me understand how the Market Cap for SD is peanuts?  You have a company with an enterprise value of $6.6B (Once you subtract the permian assets - $2.6B) you are looking at a company with an enterprise value of $4.5-5B. 

The market cap is peanuts for Fairfax. Certainly would explain recent share purchases....


FFH owns approximately 10% of shares out and TW owns 5%. If they did a joint going private transaction at $10 per share, FFH would pay $4.19B to the remaining 85%. FFH had ~$23B of cash and investments as of the latest quarter end - a SD takeout would be less than 20% of that total. Throw in some stock and debt issuance, I think the takeout would be peanuts, especially considering FFH likely sees SD worth over $20 in five years with a world-class operator such as Ward.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on January 01, 2013, 11:59:38 AM
I think the question to ask is why  FFH was able to buy such last amount without pushing up the pps. Some heavy holders are selling out.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 01, 2013, 01:38:51 PM
I think the question to ask is why  FFH was able to buy such last amount without pushing up the pps. Some heavy holders are selling out.

I dont see how this matters, you have dumb money selling to smart money. At the end of the day Prem knows 100% how this will play out. He is the one to watch, the one with all the cards.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on January 01, 2013, 02:17:52 PM
I think the question to ask is why  FFH was able to buy such last amount without pushing up the pps. Some heavy holders are selling out.

I dont see how this matters, you have dumb money selling to smart money. At the end of the day Prem knows 100% how this will play out. He is the one to watch, the one with all the cards.

It does. If TPG or any of it supporters are selling out... they will mean no quick fix. Fairfax isn't exactly minor shareholder friendly.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 02, 2013, 01:10:14 PM
Cooperman owns "a lot" of SD.

http://www.reuters.com/article/2013/01/02/us-funds-cooperman-cnbc-idUSBRE9010NA20130102
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 02, 2013, 01:30:37 PM
I bet he bought in time for the vote
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on January 03, 2013, 09:11:26 AM
This is a wonderful thread and as a Fairfax shareholder, I would like to further understand the $23B in cash and investments Fairfax has available.  I have heard Prem mention on the CC that he has $23B in cash and investments. (I am assuming it is majority with the insurance float + $1B in cash at the holdco level)  Is Fairfax allowed to put 20% of the cash and investments to work to take companies private or does a percentage of the float required to be in safe investments ie. Bonds.  Would you please shed some light on this topic? 

Thanks,
S


Would you please help me understand how the Market Cap for SD is peanuts?  You have a company with an enterprise value of $6.6B (Once you subtract the permian assets - $2.6B) you are looking at a company with an enterprise value of $4.5-5B. 

The market cap is peanuts for Fairfax. Certainly would explain recent share purchases....


FFH owns approximately 10% of shares out and TW owns 5%. If they did a joint going private transaction at $10 per share, FFH would pay $4.19B to the remaining 85%. FFH had ~$23B of cash and investments as of the latest quarter end - a SD takeout would be less than 20% of that total. Throw in some stock and debt issuance, I think the takeout would be peanuts, especially considering FFH likely sees SD worth over $20 in five years with a world-class operator such as Ward.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 03, 2013, 11:02:10 AM
This is a wonderful thread and as a Fairfax shareholder, I would like to further understand the $23B in cash and investments Fairfax has available.  I have heard Prem mention on the CC that he has $23B in cash and investments. (I am assuming it is majority with the insurance float + $1B in cash at the holdco level)  Is Fairfax allowed to put 20% of the cash and investments to work to take companies private or does a percentage of the float required to be in safe investments ie. Bonds.  Would you please shed some light on this topic? 

Thanks,
S


Would you please help me understand how the Market Cap for SD is peanuts?  You have a company with an enterprise value of $6.6B (Once you subtract the permian assets - $2.6B) you are looking at a company with an enterprise value of $4.5-5B. 

The market cap is peanuts for Fairfax. Certainly would explain recent share purchases....


FFH owns approximately 10% of shares out and TW owns 5%. If they did a joint going private transaction at $10 per share, FFH would pay $4.19B to the remaining 85%. FFH had ~$23B of cash and investments as of the latest quarter end - a SD takeout would be less than 20% of that total. Throw in some stock and debt issuance, I think the takeout would be peanuts, especially considering FFH likely sees SD worth over $20 in five years with a world-class operator such as Ward.

That's a good question - perhaps a more insurance-oriented investor could answer....

Off the top of my head however, BRK is able to purchase whole companies through its insurance subs - though I do not know what the regulatory requirements are surrounding those purchases.
Title: Re: SD - SandRidge Energy
Post by: biaggio on January 03, 2013, 02:06:04 PM
I am no expert at all but it is my understanding that an insurance company has to hold a certain amount of capital, "statutory capital", to cover potential losses.

Credit rating/ratings by regulators, financial strength is determined by amount and quality of this capital- may have x amount of capital but rating would be different if capital is US t bills vs stock in SAndbridge
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 03, 2013, 03:35:19 PM
I think FFH buying SD whole is pure speculation. Its more likely that they sell to a third party, or purchase a piece of it in a going private transaction.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 03, 2013, 06:21:42 PM
Speculation, but reasoned speculation. If you are truly a long term investor and have the resources, why not allow the best O&G operator on the planet to operate under a private umbrella with a lower cost of capital?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 03, 2013, 07:03:55 PM
FFH gets paid that cost of capital. So I dont know if its in there best interest unless the buyout happens at a decent premium by a third party. Also I cant believe they are happy with the related party transactions / high G&A spending as well. When you look into the comment it was on the fence. It wasnt firm support, but Ward wasnt thrown under the bush. It will be interesting to see where the votes come in.
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on January 03, 2013, 07:28:49 PM
why not allow the best O&G operator on the planet to operate under a private umbrella with a lower cost of capital?

Really?  I think I'd put Mark Papa's record up against Ward. Or Bob Simpson of XTO for that matter.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 03, 2013, 08:19:03 PM
I'd put myself up against Ward. I'm just paraphrasing FFH's feelings toward Ward :)
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 03, 2013, 09:10:17 PM
I'd put myself up against Ward. I'm just paraphrasing FFH's feelings toward Ward :)

Ya he was giving a nod to Prems show of support for Ward.
As bmichaud said I would put myself up against Ward, and I have little confidence in myself as an oil and gas operator, so that says alot about what I think about Ward.

With FFH earning the high cost of capital which is double what others make, it will be interesting to see how this plays out. They have to have concerns though about permanent impairment. All 3 TPG letters were very convincing and FFH runs quite lean from what I can tell.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on January 04, 2013, 08:22:14 AM
Curious as to whether anyone has added or started a postition in SD since the TPG letters came out and Fairfax started there buying. Hard to see where Fairfax would be buying just to support Ward and not see significant upside to there investment. I remember when they unloaded shares in the mid 11's and how appropriate there timing was. Would be nice if they nailed it this time also.  Long. SD
Title: Re: SD - SandRidge Energy
Post by: txlaw on January 04, 2013, 09:02:20 AM
Curious as to whether anyone has added or started a postition in SD since the TPG letters came out and Fairfax started there buying. Hard to see where Fairfax would be buying just to support Ward and not see significant upside to there investment. I remember when they unloaded shares in the mid 11's and how appropriate there timing was. Would be nice if they nailed it this time also.  Long. SD

I started buying SD LEAPS after the first TPG letter came out and have added since then.
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on January 04, 2013, 03:18:20 PM
I'd put myself up against Ward. I'm just paraphrasing FFH's feelings toward Ward :)

Gotcha!  Sorry I misunderstood.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on January 07, 2013, 04:04:11 AM
TPG and management both filed updated form 14s.
http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=IROL-sec (http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=IROL-sec)
Anytbody want to guess we see another form 4 from Fairfax today?
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 07, 2013, 01:21:27 PM
Page 7 of TPG's 14A says SD would be required to repurchase its senior notes upon a change in control, or ~$4.3B. TPG says this won't materially impact the Company....perhaps they have banks lined up in the event a default takes place?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 07, 2013, 01:37:39 PM
SD will have quite a bit of cash by the end of Jan. All of this debt is fairly high yield and it being called is probably a good thing. SD should be able to get low yield debt / credit lines to replace whatever debt remains.
Title: Re: SD - SandRidge Energy
Post by: zippy1 on January 09, 2013, 07:04:24 AM
There is a new investor presentation up in company website.
http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-presentations (http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-presentations)
Title: Re: SD - SandRidge Energy
Post by: gordoffh on January 14, 2013, 06:36:27 AM
good article from reuters

http://finance.yahoo.com/news/insight-sandridge-energys-ceo-adapted-100332747.html

Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 14, 2013, 01:29:53 PM
So I'm trying to get my arms around what exactly the economics of a well look like over its entire life versus the 50 to 100% IRR numbers thrown out by the Company and the Street. The Company recently guided me to the following:

1. Average life of a well approximately 50 years
2. Ten year decline rates go from ~60% in year 1 down to 5% terminally in year 11. In other words, the average 30d IP rate of 275 BOEPD in the Miss declines 60% by month 13.

I'm attaching a three-scenario valuation model for SD's undeveloped Miss acreage using this and other info from various sources. Would love feedback from any of the O&G experts on the board. There are so many assumptions in modeling these guys it's not even funny - so this is by no means a final piece of valuation work...just trying to getsomething out there that is reasonably constructed in order to generate discussion.

For modeling purposes, I assume the decline rate declines in a straight line from 60% in year 1 to 5% in year 11, for an annual "decline factor" of roughly 78% (i.e. the Year 2 decline rate is 78% of the Year 1 rate of 60%, or 47%). Annual average BOEPD is simply the average of the beginning and ending 30d BOEPD rate - so the 30d IP is 275, declining to 110 by end of Year 1, so Year 1 average BOEPD is 192.50.

Feel free to hammer away at anything and everything.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 14, 2013, 01:54:35 PM
Very comprehensive. I have nothing to add, but like the way you have approached it. Was of my mistakes was to leave this work to the auditors / O&G independent analyst. There are just too many assumptions though and Management can usually justify what ever number they arrive at.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 14, 2013, 06:53:43 PM
My primary concern is that current well economics are not indicative of long run economics - is SD drilling all of its best wells right now, or will they continue to get better with experience and improved technology? One offset to this concern however, is that wells tend to produce more than expected over a long period of time, especially when new technology is applied. And if SD mgmt is to be believed, D&C cost should decline over time to the $3.25mm as the salt water disposal assets are completed.

We'll see - the JV transactions in the Miss support an $8B plus valuation, but perhaps those JVs are bubble-like valuations. MOS at these levels appears reasonable though.

Lastly - if Longleaf's nat gas thesis ever materializes, this play could have HUGE upside with a ~65% weighting.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 14, 2013, 08:53:56 PM
Honestly I just want the company sold. So many ways to be misled with 1.5 million acres. No way to answer any of these questions.
Title: Re: SD - SandRidge Energy
Post by: abcd on January 17, 2013, 07:47:01 AM
Mount Kellett Sends Second Letter to the Board of SandRidge Energy

Mount Kellett and funds and accounts under common control collectively have beneficial ownership in SandRidge Energy Inc.  of 22.2 million shares, or approximately 4.5%, of the Company's outstanding common stock.

http://finance.yahoo.com/news/mount-kellett-sends-second-letter-140000012.html

Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 17, 2013, 09:50:43 AM
I think it's odd how tightly SD's stock price has clung to this 6.75 to 7.00 range over the past two weeks. Not huge volume, but the price action is strange enough to make me wonder if there isn't some type of 7 to 8 buyout negotiation going on behind the scenes. Not dissimilar to how Dell climbed just above $13 the day after the initial rumor broke and just before the announcement a 13.50 to 14 offer may be on the table. Who knows though, could just be happenstance.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 17, 2013, 01:16:59 PM
As I said its in Wards best interest to sell the company. If he losses the board he will be terminated with cause. I would sell the company now for $10 and get my parachute. With that he cant start another oil and gas company or turn WCT into one  :)
Title: Re: SD - SandRidge Energy
Post by: Mikenhe on January 17, 2013, 01:35:31 PM
As I said its in Wards best interest to sell the company. If he losses the board he will be terminated with cause. I would sell the company now for $10 and get my parachute. With that he cant start another oil and gas company or turn WCT into one  :)

I think that $12 would be a better price.... :D
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 17, 2013, 01:46:08 PM
I think it's odd how tightly SD's stock price has clung to this 6.75 to 7.00 range over the past two weeks. Not huge volume, but the price action is strange enough to make me wonder if there isn't some type of 7 to 8 buyout negotiation going on behind the scenes. Not dissimilar to how Dell climbed just above $13 the day after the initial rumor broke and just before the announcement a 13.50 to 14 offer may be on the table. Who knows though, could just be happenstance.

That would be rough, and would piss everyone off. I dont see it happening. FFH, River, TPG, Mount Kelly, and any other LT shareholder would vote against it. At 9, I am happy, but would prefer $10 or $11.
Title: Re: SD - SandRidge Energy
Post by: gordoffh on January 22, 2013, 06:26:19 AM
TPG head Singh was on NBC squawkbox this morning. Battle front and center now. Rehash of what was in letter but he does say Ward must go.
Title: Re: SD - SandRidge Energy
Post by: longlake95 on January 22, 2013, 06:37:44 AM
Prem's position on SD/Ward is adding an interesting angle to this while situation. You'd think Prem would want $12, then move to the next idea. Hmmmm. I still think there will be enough pressure from other large investors to envoke change.
Title: Re: SD - SandRidge Energy
Post by: bmichaud on January 22, 2013, 11:39:19 AM
Susquehanna note via Bloomerg:


By Arie Shapira and Clyde Eltzroth
     Jan. 22 (Bloomberg) -- SandRidge has “appealing upside”
regardless of March 15 activist vote deadline outcome,
Susquehanna analyst Duane Grubert writes in note.
• Expects “modest” share buybacks and/or new partnerings given $2.6b of Permian sales proceeds due in 1Q
• Sees potential for SD to be sold prior to conclusion of activist vote
• Susquehanna rates SD positive, PT $12



A buyback would be shocking, to say the least. This thing is hideous from a cash flow standpoint on a standalone basis.

Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 22, 2013, 01:26:50 PM
Prem's position on SD/Ward is adding an interesting angle to this while situation. You'd think Prem would want $12, then move to the next idea. Hmmmm. I still think there will be enough pressure from other large investors to envoke change.

Prem would clean up. His converts I believe are striked at between $8 and $10. Most of the new shares were bought in the 6s. Seems like a no brainer.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on January 22, 2013, 03:21:17 PM
 TPG-Axon letter to shareholders: (I agree fully with TPG-Axon and hopefully we can sell this company for $10-12/share)

http://www.marketwatch.com/story/tpg-axon-commences-solicitation-to-amend-sandridge-energys-bylaws-and-replace-the-companys-board-of-directors-2013-01-22
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 22, 2013, 04:03:27 PM
It would be interesting to see if Ward ultimately wins or losses in a take under. He was paid handsomely over the last few years, but has basis on his stock and will have a capital loss. He also would likely be dismissed with cause if he doesnt sale it prior to the vote.

At $11 I would be quite the happy camper.

Just read the letter - My guess is with the sales over the last few years he did ok.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on January 23, 2013, 01:28:25 PM
http://www.shareholdersforsandridge.com/wp-content/uploads/2013/01/SandRidge-Related-Party-Land-Transactions-1-23-2013-FINAL.pdf

You dont call it unless you have the votes / goods. This is getting more and more interesting.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on January 25, 2013, 10:53:00 AM
http://professional.wsj.com/article/SB10001424127887323539804578263581448097500.html?mod=WSJ_business_whatsNews&mg=reno64-wsj (http://professional.wsj.com/article/SB10001424127887323539804578263581448097500.html?mod=WSJ_business_whatsNews&mg=reno64-wsj)

SandRidge Says No Wrongdoing by CEO Found .



SandRidge Energy Inc. SD +0.17%said its board reviewed investors' allegations of Chairman and Chief Executive Tom Ward benefiting from mineral rights sold to the oil-and-gas producer and has found no wrongdoing.

SandRidge has come under increased pressure from certain shareholders to shake up its board, to replace Mr. Ward and to explore a possible sale of the company. Investment firm Mount Kellett Capital Management LP had called for the suspension of Mr. Ward earlier this month over allegations he and his son benefited from mineral rights sold through WCT Resources LLC, an independent oil-and-gas company formed in 2002 for Mr. Ward's children. Mount Kellett owns about 4.5% of SandRidge's shares.

TPG-Axon Capital Management LP, which owns about 6.7% of SandRidge's stock outstanding, said Wednesday it hired investigators to comb through Oklahoma and Kansas court records as part of its effort to convince SandRidge's shareholders to overthrow the current board and amend the company's bylaws. TPG-Axon filed last month to seek shareholder approval in order to change the energy company's bylaws and replace its entire board of directors, including Mr. Ward.

SandRidge said Friday its independent directors will consider the requests of TPG-Axon and Mount Kellett for the appointment of independent counsel and other investigative measures concerning the activities surrounding their allegations.
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on January 28, 2013, 03:20:54 PM
Consent solicitation received today from TPG-Axon and Sandridge management.
Title: Re: SD - SandRidge Energy
Post by: muscleman on January 29, 2013, 01:16:35 PM
Consent solicitation received today from TPG-Axon and Sandridge management.

What is the deadline?
I sold my shares in December and bought a small number of $6 call options expiring June 2013. I hope the drama is over by then.
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on January 29, 2013, 06:36:30 PM
http://www.fortmilltimes.com/2013/01/29/2465134/law-offices-of-howard-g-smith.html

Quote
BENSALEM, Pa. --

Law Offices of Howard G. Smith announces that it is investigating potential claims on behalf of shareholders of SandRidge Energy, Inc. (“SandRidge” or the “Company”) (NYSE:SD). The investigation concerns possible breaches of fiduciary duties by the Company or its fiduciaries.
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on January 29, 2013, 07:32:58 PM
http://finance.yahoo.com/news/chesapeake-ceo-mcclendon-steps-down-000834150.html

McClendon steps down.  The first shoe...TW?

Edit : April 1st departure date for Aubrey.  Come on, they couldn't pick another day?
Title: Re: SD - SandRidge Energy
Post by: Packer16 on January 31, 2013, 07:33:36 PM
I received the consent solicitation.  Who are you guys voting for?  I liked TPG-Axon's approach but the guys they are nominating have little O&G experience so I assume they would sell the company. But wouldn't selling the company in such a manner (having primarily financial guys on our side of the table) put SD at a disadvantage versus the buyers who have experienced oil guys at the table?  In essence, SD is a forced seller?  Does anyone know what FFH's position is?  I would have like to have seen TPG provide more O&G guys so if the sale doesn't happen there is an alternative.

Packer
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on February 01, 2013, 03:13:53 PM
SandRidge Mississippian Trust units tumble 14 pct.
http://finance.yahoo.com/news/sandridge-mississippian-trust-units-tumble-180638045.html

Shares of SandRidge Mississippian Trust II tumbled Friday after the owner of oil and natural gas wells announced a lower-than-expected distribution for the fourth-quarter because of a drop in sales volumes.

SandRidge Mississippian declared a distribution of 53.3 cents per unit. The distribution will take place on or before March 1 and will go to shareholders of record as of Feb. 14. The trust said that for the three months ended Nov. 30, its sales volumes fell 7 percent compared to the same period a year ago.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 01, 2013, 04:44:51 PM
SandRidge Mississippian Trust units tumble 14 pct.
http://finance.yahoo.com/news/sandridge-mississippian-trust-units-tumble-180638045.html

Shares of SandRidge Mississippian Trust II tumbled Friday after the owner of oil and natural gas wells announced a lower-than-expected distribution for the fourth-quarter because of a drop in sales volumes.

SandRidge Mississippian declared a distribution of 53.3 cents per unit. The distribution will take place on or before March 1 and will go to shareholders of record as of Feb. 14. The trust said that for the three months ended Nov. 30, its sales volumes fell 7 percent compared to the same period a year ago.

I think this is somewhat expected. I will get some common at low 6.
Title: Re: SD - SandRidge Energy
Post by: ourkid8 on February 01, 2013, 09:49:47 PM
A vote for TPG-Axon Group slate of directors essentially means you want to put the company up for sale ($10-$14/share) and a vote for Sandridge's current directors would be more of the same.  (excess spending, destroying shareholder value,  and numerous unethical behaviour)   I am seriously surprised after all those allegations Fairfax will continue to support TW.  We all agree there is value and SD really it needs a strong operator to run this company to create shareholder value.

My vote will be towards TPG-Axon to sell this company so I can allocate the capital into high quality companies with management committed to creating shareholder value.  I have received the WHITE card (Sandridge's card) so far and waiting for TPG-Axon's green card. 

tks,
S

I received the consent solicitation.  Who are you guys voting for?  I liked TPG-Axon's approach but the guys they are nominating have little O&G experience so I assume they would sell the company. But wouldn't selling the company in such a manner (having primarily financial guys on our side of the table) put SD at a disadvantage versus the buyers who have experienced oil guys at the table?  In essence, SD is a forced seller?  Does anyone know what FFH's position is?  I would have like to have seen TPG provide more O&G guys so if the sale doesn't happen there is an alternative.

Packer
Title: Re: SD - SandRidge Energy
Post by: plato1976 on February 07, 2013, 09:19:50 AM
sounds like a plan:

http://www.shareholdersforsandridge.com/wp-content/uploads/2013/02/Creating-Value-at-SandRidge.pdf

but I am afraid that Fairfax with a debt interest thinks otherwise  :)

I have a feeling TPG won't prevail at the end


A vote for TPG-Axon Group slate of directors essentially means you want to put the company up for sale ($10-$14/share) and a vote for Sandridge's current directors would be more of the same.  (excess spending, destroying shareholder value,  and numerous unethical behaviour)   I am seriously surprised after all those allegations Fairfax will continue to support TW.  We all agree there is value and SD really it needs a strong operator to run this company to create shareholder value.

My vote will be towards TPG-Axon to sell this company so I can allocate the capital into high quality companies with management committed to creating shareholder value.  I have received the WHITE card (Sandridge's card) so far and waiting for TPG-Axon's green card. 

tks,
S

I received the consent solicitation.  Who are you guys voting for?  I liked TPG-Axon's approach but the guys they are nominating have little O&G experience so I assume they would sell the company. But wouldn't selling the company in such a manner (having primarily financial guys on our side of the table) put SD at a disadvantage versus the buyers who have experienced oil guys at the table?  In essence, SD is a forced seller?  Does anyone know what FFH's position is?  I would have like to have seen TPG provide more O&G guys so if the sale doesn't happen there is an alternative.

Packer
Title: Re: SD - SandRidge Energy
Post by: bmichaud on February 08, 2013, 09:13:19 AM
TPG's presentation is interesting, particularly the "field-level" EBITDA analysis. Ironically, I did precisely the same analysis two weeks ago, looking at "stacked production" in order to ascertain when SD would actually start generating sustainable cash flow.... I subsequently exited the stock after concluding there is ZERO margin of safety if the status quo is maintained. IMO, even TPG's best case scenario is a stretch, as it assumes SD is worth 8x Miss Lime operating cash flow....

I'm seriously starting to question the validity of any and all NAV calculations for the sector. SD's NAV is an utter fantasy (I'm shocked Fairfax is such a proponent of the company) and from what I can tell, so is Elliot's NAV work on Hess.

This sector is quickly making its way into the "too hard" pile....
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 08, 2013, 09:25:20 AM
TPG's presentation was very interesting. It's hard to see how FFH can honestly say they back TW. The facts don't lie, there's been an awfull lot of value destruction. The "related party transaction" appendix is painful to read as an "owner". As for the NAV's, I learned to give  them a 20% haircut, for added conservitism.

I wonder if TPG has called Icahn.  ;)
I'm still waiting for my green card.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on February 08, 2013, 09:54:46 AM

Can we say it's shameless threat ?

http://www.reuters.com/article/2013/02/08/sandridge-ward-idUSL4N0B86MV20130208?feedType=RSS&feedName=marketsNews&rpc=43

This thing is going crazy...

TPG's presentation was very interesting. It's hard to see how FFH can honestly say they back TW. The facts don't lie, there's been an awfull lot of value destruction. The "related party transaction" appendix is painful to read as an "owner". As for the NAV's, I learned to give  them a 20% haircut, for added conservitism.

I wonder if TPG has called Icahn.  ;)
I'm still waiting for my green card.
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 08, 2013, 10:14:53 AM
Is Mount Kellett Cap, officially on board/ backing TPG? Hmmmm, we really need Carl to come in a stomp out TW and crew.
BTW, here's some info on the Sandridge Airforce:

Tom and the sd board really like airplanes. Here's a list of the fleet.



N552SD



Tom's ride, a Falcon 900. This baby has 3 engines and transcontinental range.

Registered to Cornhusker LLC on March 2, 2012 a subsiderary of SD. however, the plane has Sandridge painted on it

Puchase price $21,000,000



N551SD



This is Grub's and White's ride, a Challenger 600.

Registered to Sandridge on July 25, 2009

Purchase price $5,500,000



N554SD



A Citation 560

Registered to Sandridge on Aug. 26 2011

Purchase price $3,200,000



N553SD



A Citation S550

Registered to Sandridge on July 13th, 2007

Purchase price unknown



You can view the pictures of the beautiful birds,registration info, and flight tracking of the 2 smaller jets, the big boys block their flights, at flightaware . Just type in the N# of the plane you want to see, and click on the picture or registration.



Since Tom Ward's salary and new airplane purchase cost the company $51,000,000 in 2012, plus thecosts of operation (including 12 pilots, 2 flight attendents, 3 mechanics) I guess you could say Tom and board do have our interests at heart.....but only if you like airplanes.


I know the operating capabilities of most of these airplanes, and a simple Citation 550 would get TW and crew to most of SD's fields quite easily.
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on February 08, 2013, 12:57:05 PM
Anybody loading up in anticipation of Ward getting the boot?

Interesting trade here:

http://finance.yahoo.com/news/nerves-edge-sandridge-energy-155118407.html

Quote
optionMONSTER's Depth Charge tracking program detected the purchase of 12,500 June 6 puts for $1.03 and the sale of 25,000 June 5 puts for $0.51. Volume exceeded the previous open interest at each strikes, indicating that these are new positions.

The trade cost just $0.01 and will earn a maximum profit of 9,900 percent if SD closes at $5 on expiration. Gains will erode below that level and turn to losses under $5. It's known as a ratio spread because twice as many contracts are sold at the lower strike as the number bought at the higher strike.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 08, 2013, 01:03:54 PM

Can we say it's shameless threat ?

http://www.reuters.com/article/2013/02/08/sandridge-ward-idUSL4N0B86MV20130208?feedType=RSS&feedName=marketsNews&rpc=43

This thing is going crazy...

TPG's presentation was very interesting. It's hard to see how FFH can honestly say they back TW. The facts don't lie, there's been an awfull lot of value destruction. The "related party transaction" appendix is painful to read as an "owner". As for the NAV's, I learned to give  them a 20% haircut, for added conservitism.

I wonder if TPG has called Icahn.  ;)
I'm still waiting for my green card.

They have 11% now?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 09, 2013, 08:32:31 AM
Anybody loading up in anticipation of Ward getting the boot?

Interesting trade here:

http://finance.yahoo.com/news/nerves-edge-sandridge-energy-155118407.html

Quote
optionMONSTER's Depth Charge tracking program detected the purchase of 12,500 June 6 puts for $1.03 and the sale of 25,000 June 5 puts for $0.51. Volume exceeded the previous open interest at each strikes, indicating that these are new positions.

The trade cost just $0.01 and will earn a maximum profit of 9,900 percent if SD closes at $5 on expiration. Gains will erode below that level and turn to losses under $5. It's known as a ratio spread because twice as many contracts are sold at the lower strike as the number bought at the higher strike.


I added some, I think he will be out even with Prem's support.  Even if he is not, some of what TPG suggests will get implemented is the margin of safety.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on February 09, 2013, 12:19:52 PM
Has anyone read the latest presentation from TPG?

http://www.shareholdersforsandridge.com/presentations/

Enjoy!
Zorro
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 09, 2013, 04:48:12 PM
http://www.foxbusiness.com/news/2013/02/06/exclusive-sandridge-gives-ceo-wide-scope-to-cut-his-own-land-deals/

"We continue to strongly support Tom and his leadership at SandRidge," said Paul Rivett, vice president of operations at Fairfax, which owns more than 11 percent of SandRidge's shares. "It seems to me that obviously Tom's done a lot of good and he's been transparent about his relationship with the company and the related-party transactions."

Read more: http://www.foxbusiness.com/news/2013/02/06/exclusive-sandridge-gives-ceo-wide-scope-to-cut-his-own-land-deals/#ixzz2KS8Jb0Pk

Title: Re: SD - SandRidge Energy
Post by: rijk on February 10, 2013, 03:19:38 AM
puzzled by rivett's statements.....

could it be that fairfax "support" for tw is driven by a desire to significantly expand their ownership of sd and that they are willing to take short term pain (tw inefficiencies, share price drop) in order to avoid competition from the tpg club/sd takeover to achieve their larger objective?

regards
rijk
Title: Re: SD - SandRidge Energy
Post by: biaggio on February 10, 2013, 06:07:49 AM
puzzled by rivett's statements.....

could it be that fairfax "support" for tw is driven by a desire to significantly expand their ownership of sd and that they are willing to take short term pain (tw inefficiencies, share price drop) in order to avoid competition from the tpg club/sd takeover to achieve their larger objective?

regards
rijk

I don  t know Sandridge but own FFH.

Mr Watsa, Rivait strike me as guys that would not criticize and embarass TW through the media. I hope they would not support this type of capital allocation (using shareholder funds for their own benefit) from their managers. Then again Tom does not work directly with him. Maybe they are being "good cops", smart in not being obnoxious and burning bridges.

Like the guy at Chesapeake, it seems like his strategy is to make money off of shareholders not with shareholders.

It hurts especially when the shareholders have been losing. Human nature would probably ignore these things if everyone was getting rich.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 10, 2013, 06:31:07 AM
I agree, from FBK experience, it seems these FFH guys, behind closed door, are different men when in front of public eyes.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 13, 2013, 09:34:02 AM
I agree, from FBK experience, it seems these FFH guys, behind closed door, are different men when in front of public eyes.

I was a shareholder for both SD and FFH.
After the TPG news in December, I took advantage of that and unloaded my SD shares break even. I bought a small amount of June calls and it is bleeding.
Today I sold my FFH shares too, because what Prem is doing with SD is quite confusing to me, and I felt the same as you do.
 
Title: Re: SD - SandRidge Energy
Post by: plato1976 on February 13, 2013, 09:46:53 AM
yep, that's why I unloaded some FFH days ago
just couldn't understand...
I have never frowned over their hedge protection, CPI derivative, book value stagnation over the past few years and so on
It's really this weird thing that concerns me the most

I agree, from FBK experience, it seems these FFH guys, behind closed door, are different men when in front of public eyes.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 13, 2013, 09:50:49 AM
yep, that's why I unloaded some FFH days ago
just couldn't understand...
I have never frowned over their hedge protection, CPI derivative, book value stagnation over the past few years and so on
It's really this weird thing that concerns me the most

I agree, from FBK experience, it seems these FFH guys, behind closed door, are different men when in front of public eyes.

Yep. Remember a few years ago some bad guys attacked FFH and claimed it is a fraud? Maybe those guys are partially correct, or maybe FFH conspired with the auditor and made it through? Who knows the truth. If it is 100% clean, I can't imagine why they got attacked. Why don't those guys attack BRK? ::)
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 10:34:32 AM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers! 
Title: Re: SD - SandRidge Energy
Post by: sampr01 on February 13, 2013, 10:47:58 AM
Hi Sanjeev

What is your take on SD and do you think FFH vote against SD management?. Thanks
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 10:57:06 AM
Hi Sanjeev

What is your take on SD and do you think FFH vote against SD management?. Thanks

I don't know.  At present, they are showing support for the CEO, but I would suspect that internally if they aren't satisfied with the CEO's compensation or structure, or the operations of the business, they will prod and make appropriate changes.  You've seen them do this at other companies they've invested in, and they've even put someone from the company on the board on several occasions.  You think the changes at RIM weren't propagated one way or another by Fairfax?  Prem doesn't like acting as an activist sort of investor, but at some point, whether it is to preserve shareholder value or reputation, he will step in if he has to.  It's what makes him such a respected leader.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: wellmont on February 13, 2013, 10:58:25 AM

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

 :-[ :-[ :-[ :-[ :-[
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 11:04:09 AM

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

 :-[ :-[ :-[ :-[ :-[

It was a rant to help people get their head out of their butts.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on February 13, 2013, 11:11:40 AM
Has Buffett ever been involved with an investment whose CEO has had issues with (shall we say) "ethical transparency"?
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 11:27:24 AM
Has Buffett ever been involved with an investment whose CEO has had issues with (shall we say) "ethical transparency"?

Forget investment...what about future CEO in Sokol.  Prem doesn't take quite the hardline that Buffett does.  He gives people an opportunity to rectify things.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: enoch01 on February 13, 2013, 11:27:36 AM
Has Buffett ever been involved with an investment whose CEO has had issues with (shall we say) "ethical transparency"?

Quote
There is no shortage, Buffett says, of "vital matters" that Gutfreund, Strauss, and Feuerstein kept from the directors in the previous months, all the while acting as if things were perfectly normal. But not conveying the Fed letter to the board was in his thinking "the atom bomb." Or maybe, he says, a more earthy description fits: "Understandably, the Fed felt at this point that the directors had joined with management in spitting in its face."

http://money.cnn.com/magazines/fortune/fortune_archive/1997/10/27/233308/index.htm

It's debatable when Buffett thought Gutfreund had issues with something like "ethical transparency".  Probably it wasn't until after he learned all the facts of the bidding scandal.
Title: Re: SD - SandRidge Energy
Post by: berkshiremystery on February 13, 2013, 11:43:05 AM
Leon Cooperman's Omega took a new stake in SandRidge Energy Inc of 24.38 million shares.


http://www.reuters.com/article/2013/02/13/funds-investing-omega-idUSL1N0BDDKG20130213?feedType=RSS&feedName=financialsSector&rpc=43
Title: Re: SD - SandRidge Energy
Post by: txlaw on February 13, 2013, 12:08:10 PM
Here's my take on SD and FFH, for what it's worth.

I think that, like SEAM and Aubrey McClendon, HWIC and Mr. Watsa will give Tom Ward a chance to redeem himself in some way, and they are going to take the same measured approach to the SD situation as SEAM did with CHK.  TPG-Axon is like Icahn, and FFH is like SEAM.

It's not all black and white with McClendon and Ward.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 13, 2013, 12:36:50 PM
Here's my take on SD and FFH, for what it's worth.

I think that, like SEAM and Aubrey McClendon, HWIC and Mr. Watsa will give Tom Ward a chance to redeem himself in some way, and they are going to take the same measured approach to the SD situation as SEAM did with CHK.  TPG-Axon is like Icahn, and FFH is like SEAM.

It's not all black and white with McClendon and Ward.

Maybe. But if that is true, Tom currently should be at least facing a lot of pressure from Prem, and he should have already announced some kind of pay cuts or so. What I only see is that Tom blatantly denied any allegations from TPG, so I felt like Prem wholeheartedly supported Tom from the beginning.
FFH only has 11% of the common, so there is still a good chance that TPG could win.
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 12:58:35 PM
Here's my take on SD and FFH, for what it's worth.

I think that, like SEAM and Aubrey McClendon, HWIC and Mr. Watsa will give Tom Ward a chance to redeem himself in some way, and they are going to take the same measured approach to the SD situation as SEAM did with CHK.  TPG-Axon is like Icahn, and FFH is like SEAM.

It's not all black and white with McClendon and Ward.

I agree.  At the same time, I think there has been some attention showered upon SD, not to mention CHK, that deserved the light of day.  Now it's up to the CEO and his shareholders to decide what the outcome is from all of this, whether things are equitable, and if not what change is in store. 

I just think that people are jumping to conclusions about Prem's views on the subject...something which we have not heard other than the typical "we support the CEO" standard quote.  He doesn't air his dirty laundry in public and whatever he needs to say will be heard by Tom Ward's ears only.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: FFHfan on February 13, 2013, 01:01:41 PM
Mr. Watsa is not Mr. TW babysitter. TW makes his own decisions however rational or irrational they are. As a longterm shareholder in Fairfax I expect small mistakes from time to time. At the end of the day they are human beings and we humans are prone to make mistakes from time to time. What I don't want to see is a "permant loss of capital".

Btw. I would love to buy more FFH stock at book value or below. I plan to hold my investment in FFH for the next 30 to 40 years. So if I can cheaply increase my interest in my business, even better.   :)
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 13, 2013, 01:29:28 PM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

Calm down, Sanjeev. The fact that FFH fully supports TW makes me confused and unable to understand, so I sold. We should always stick with investments that we understand, and avoid ones that we can't understand. If you can understand FFH well, that is great for you. I can't, so I must be disciplined and avoid it. I can't buy just because some other reputable folks bought it.

I am not saying if FFH is a fraud, or it is not a fraud. I am saying that it is something I couldn't understand. Is that fair?
On the other hand, I am still a newbie investor. I am eager to learn more from you veterans. 8)
Title: Re: SD - SandRidge Energy
Post by: txlaw on February 13, 2013, 01:43:58 PM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

Calm down, Sanjeev. The fact that FFH fully supports TW makes me confused and unable to understand, so I sold. We should always stick with investments that we understand, and avoid ones that we can't understand. If you can understand FFH well, that is great for you. I can't, so I must be disciplined and avoid it. I can't buy just because some other reputable folks bought it.

I am not saying if FFH is a fraud, or it is not a fraud. I am saying that it is something I couldn't understand. Is that fair?
On the other hand, I am still a newbie investor. I am eager to learn more from you veterans. 8)

I think what set Sanjeev off was the following statement:

Yep. Remember a few years ago some bad guys attacked FFH and claimed it is a fraud? Maybe those guys are partially correct, or maybe FFH conspired with the auditor and made it through? Who knows the truth. If it is 100% clean, I can't imagine why they got attacked. Why don't those guys attack BRK? ::)

I can understand why you might get pissed off at this comment, especially if you were there alongside FFH battling it out during that time.  It is the Corner of Berkshire and Fairfax -- just saying.

As to full support for TW, my sense is that even if FFH was opposed to TW and was pushing for change in the background, they wouldn't be airing that before the public.  Doesn't seem like FFH's style.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 13, 2013, 02:05:39 PM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

Calm down, Sanjeev. The fact that FFH fully supports TW makes me confused and unable to understand, so I sold. We should always stick with investments that we understand, and avoid ones that we can't understand. If you can understand FFH well, that is great for you. I can't, so I must be disciplined and avoid it. I can't buy just because some other reputable folks bought it.

I am not saying if FFH is a fraud, or it is not a fraud. I am saying that it is something I couldn't understand. Is that fair?
On the other hand, I am still a newbie investor. I am eager to learn more from you veterans. 8)

I think what set Sanjeev off was the following statement:

Yep. Remember a few years ago some bad guys attacked FFH and claimed it is a fraud? Maybe those guys are partially correct, or maybe FFH conspired with the auditor and made it through? Who knows the truth. If it is 100% clean, I can't imagine why they got attacked. Why don't those guys attack BRK? ::)

I can understand why you might get pissed off at this comment, especially if you were there alongside FFH battling it out during that time.  It is the Corner of Berkshire and Fairfax -- just saying.

As to full support for TW, my sense is that even if FFH was opposed to TW and was pushing for change in the background, they wouldn't be airing that before the public.  Doesn't seem like FFH's style.

I see. I didn't start learning investing until late 2009, so I wasn't around that time for the FFH battle.
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 02:07:23 PM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

Calm down, Sanjeev. The fact that FFH fully supports TW makes me confused and unable to understand, so I sold. We should always stick with investments that we understand, and avoid ones that we can't understand. If you can understand FFH well, that is great for you. I can't, so I must be disciplined and avoid it. I can't buy just because some other reputable folks bought it.

I am not saying if FFH is a fraud, or it is not a fraud. I am saying that it is something I couldn't understand. Is that fair?
On the other hand, I am still a newbie investor. I am eager to learn more from you veterans. 8)

Hi Muscleman, the rant was not aimed at you specifically.  I just noticed the posts were getting more and more pessimistic about Fairfax and Prem's ethics.  You just happened to be the last poster.

In terms of selling your FFH stock, you do realize that Fairfax has perhaps $200M invested in Sandridge, and Fairfax's investment portfolio and cash is $25B!  So they have less than 1% of the investible portfolio in Sandridge.  Even if you fired Tom Ward and sold the company for twice it's current price, that would have less than a 2% effect on Fairfax.  I think investor's lose sight of the big picture, and thus the rant.

Cheers!
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on February 13, 2013, 02:11:39 PM
(http://farm9.staticflickr.com/8091/8472211112_316c2424db.jpg)
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 13, 2013, 02:16:36 PM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

Calm down, Sanjeev. The fact that FFH fully supports TW makes me confused and unable to understand, so I sold. We should always stick with investments that we understand, and avoid ones that we can't understand. If you can understand FFH well, that is great for you. I can't, so I must be disciplined and avoid it. I can't buy just because some other reputable folks bought it.

I am not saying if FFH is a fraud, or it is not a fraud. I am saying that it is something I couldn't understand. Is that fair?
On the other hand, I am still a newbie investor. I am eager to learn more from you veterans. 8)

Hi Muscleman, the rant was not aimed at you specifically.  I just noticed the posts were getting more and more pessimistic about Fairfax and Prem's ethics.  You just happened to be the last poster.

In terms of selling your FFH stock, you do realize that Fairfax has perhaps $200M invested in Sandridge, and Fairfax's investment portfolio and cash is $25B!  So they have less than 1% of the investible portfolio in Sandridge.  Even if you fired Tom Ward and sold the company for twice it's current price, that would have less than a 2% effect on Fairfax.  I think investor's lose sight of the big picture, and thus the rant.

Cheers!


Got you. I was lazy when I bought FFH. I didn't no any homework. I bought it just as a blind trust to temporarily hold my cash. Just like my BRK.B position. I sold it as soon as I find other interesting investments to buy. I didn't have the long term plan to hold it for 30 years. :)
When I feel like this is probably not as safe as I thought, as a place holder for cash, I sold it. That's it. I probably shouldn't have said anything about whether FFH is a fraud or not, because I didn't really have any real opinion on that.
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 13, 2013, 02:26:08 PM
(http://farm9.staticflickr.com/8091/8472211112_316c2424db.jpg)

That's what they said to Steve Jobs when they fired him from Apple the first time too!   ;D  Cheers!
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 14, 2013, 09:16:15 AM
Sorry if this was already posted:

Omega buys stake in SD.

 
Cooperman's fund also took a new stake in SandRidge Energy Inc of 24.38 million shares, and a new stake of 3.16 million shares in Facebook Inc in the fourth quarter. The fund increased its stake in McMoRan Exploration Co by about 1.8 million shares.

I'm willing to bet he backs TPG.

 ;D

Title: Re: SD - SandRidge Energy
Post by: muscleman on February 14, 2013, 11:24:14 AM
Sorry if this was already posted:

Omega buys stake in SD.

 
Cooperman's fund also took a new stake in SandRidge Energy Inc of 24.38 million shares, and a new stake of 3.16 million shares in Facebook Inc in the fourth quarter. The fund increased its stake in McMoRan Exploration Co by about 1.8 million shares.

I'm willing to bet he backs TPG.

 ;D


I sold my FFH position yesterday and bought SD today with that sales proceeds. I think TPG has a good chance to win. Cooperman bought at an average price of $6.7, which means that if he votes no, he would likely get hammered on this position. Then why would he buy in the first place? Why not wait until the vote has come out as no, and buy at a much lower price?
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 14, 2013, 11:29:10 AM
(http://farm9.staticflickr.com/8091/8472211112_316c2424db.jpg)

That's what they said to Steve Jobs when they fired him from Apple the first time too!   ;D  Cheers!

Sanjeev, or any other FFH long term shareholders, could you please tell me if Prem had ever made fortune by hurting other minority shareholders? For example, if the TPG vote comes out to be no, I think share prices will drop a lot. Will Prem take that chance to buy even more, and potentially take over SD at a price, say, $4 per share? If that happens, all other shareholders are hurt.
I know there is a poison pill, so this is likely not going to happen. But I still would like to ask just in case.
For other SD shareholders, what do you think would happen when the TPG vote comes out as a no? Will they buy more and try to do another round of attack to get rid of Tom? I can't see why they would just give up and sell the shares.
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 14, 2013, 11:35:52 AM
(http://farm9.staticflickr.com/8091/8472211112_316c2424db.jpg)

That's what they said to Steve Jobs when they fired him from Apple the first time too!   ;D  Cheers!

Sanjeev, or any other FFH long term shareholders, could you please tell me if Prem had ever made fortune by hurting other minority shareholders? For example, if the TPG vote comes out to be no, I think share prices will drop a lot. Will Prem take that chance to buy even more, and potentially take over SD at a price, say, $4 per share? If that happens, all other shareholders are hurt.
I know there is a poison pill, so this is likely not going to happen. But I still would like to ask just in case.
For other SD shareholders, what do you think would happen when the TPG vote comes out as a no? Will they buy more and try to do another round of attack to get rid of Tom? I can't see why they would just give up and sell the shares.

None that I know of.  Some may argue that FBK would fall into that category, but they were already aligned and supportive of Abitibi and it's management, but had a large stake in FBK as well.  They voted with Abitibi. 

Prem's intention is to always increase shareholder value.  If the value of his ownership increases, that means the value of all other shareholder's increases.  His company is called Fairfax because they want "Fair" and "Friendly" "Acquistions".  He doesn't go out of his way to be confrontational or exploitive.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: berkshiremystery on February 14, 2013, 11:59:12 AM
Sorry if this was already posted:

Omega buys stake in SD.

 
Cooperman's fund also took a new stake in SandRidge Energy Inc of 24.38 million shares, and a new stake of 3.16 million shares in Facebook Inc in the fourth quarter. The fund increased its stake in McMoRan Exploration Co by about 1.8 million shares.

I'm willing to bet he backs TPG.

 ;D

Not only Fairfax & Omega,....

...you should also include Jorge Paulo Lemann/ 3G. (aka Buffett's partner in the Heinz deal) as a SD shareholder.

http://www.insidermonkey.com/hedge-fund/3g+capital/278/?fp=2012-09-30
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 14, 2013, 12:32:39 PM
(http://farm9.staticflickr.com/8091/8472211112_316c2424db.jpg)

That's what they said to Steve Jobs when they fired him from Apple the first time too!   ;D  Cheers!

Sanjeev, or any other FFH long term shareholders, could you please tell me if Prem had ever made fortune by hurting other minority shareholders? For example, if the TPG vote comes out to be no, I think share prices will drop a lot. Will Prem take that chance to buy even more, and potentially take over SD at a price, say, $4 per share? If that happens, all other shareholders are hurt.
I know there is a poison pill, so this is likely not going to happen. But I still would like to ask just in case.
For other SD shareholders, what do you think would happen when the TPG vote comes out as a no? Will they buy more and try to do another round of attack to get rid of Tom? I can't see why they would just give up and sell the shares.

None that I know of.  Some may argue that FBK would fall into that category, but they were already aligned and supportive of Abitibi and it's management, but had a large stake in FBK as well.  They voted with Abitibi. 

Prem's intention is to always increase shareholder value.  If the value of his ownership increases, that means the value of all other shareholder's increases.  His company is called Fairfax because they want "Fair" and "Friendly" "Acquistions".  He doesn't go out of his way to be confrontational or exploitive.  Cheers!

Thanks for your insights. ;D
Is there any chance that while FFH said in public that they support TW, they actually vote yes for the TPG vote? It is illegal to do that right? Why won't they just take that opportunity to get rid of TW, instead of waiting and hoping that TW suddenly changes his heart and become a good man?
Title: Re: SD - SandRidge Energy
Post by: nestorius on February 14, 2013, 01:52:17 PM
Per 13G released this afternoon, FFH has increased their stake to 62.5 million shares, or 12%.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 14, 2013, 02:01:19 PM
Okay, so, who is selling out?

Title: Re: SD - SandRidge Energy
Post by: muscleman on February 14, 2013, 02:06:59 PM
Okay, so, who is selling out?

Some random retail folks, or some short sellers?
Title: Re: SD - SandRidge Energy
Post by: berkshiremystery on February 14, 2013, 02:07:42 PM
Per 13G released this afternoon, FFH has increased their stake to 62.5 million shares, or 12%.

Thanks,.... just went through the filing....

http://www.sec.gov/Archives/edgar/data/915191/000119312513059343/d486660dsc13ga.htm
Title: Re: SD - SandRidge Energy
Post by: zippy1 on February 14, 2013, 02:30:45 PM
Okay, so, who is selling out?
Oh, there is a Goldman Sachs 13G also. They are now at 19m shares.  As of 09/30/12, GS had 24m shares. So, part of the selling is from GS.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 15, 2013, 08:12:03 AM
Does anyone have a detailed breakdown of the major shareholders?
Yahoo shows that
RIVERSTONE/CARLYLE ENERGY PARTNERS IV, L.P. holds 10.45%.

So we have TPG: 6.6%. GS, 5%. Cooperman 5%. Mount Kellett 5%.
These folks add up to over 21%. If they can get RIVERSTONE to vote yes too, that would be 31%.
From the media I see some random mutual fund complaining about TW too, so maybe those funds will vote yes too.

Does anyone think Cooperman would join the fight with a vote for no?


Has anyone received the white card from TW? I think he is trying to confuse shareholders with the green card that TPG sent.

Title: Re: SD - SandRidge Energy
Post by: thomcapital on February 15, 2013, 08:30:59 AM
Does anyone have a detailed breakdown of the major shareholders?

See attached...
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 15, 2013, 08:58:40 AM
added today @ $5.72, the scale is tipping out of TW's favour.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 15, 2013, 09:15:35 AM
Does anyone have a detailed breakdown of the major shareholders?

See attached...

Thanks a lot! Looks like you have already done the homework! So we would expect the result to come out in mid March?
Why do Calyle and Riverstone hold exactly the same share count? That must be some kind of duplicate.
Title: Re: SD - SandRidge Energy
Post by: thomcapital on February 15, 2013, 09:37:08 AM
Thanks a lot! Looks like you have already done the homework! So we would expect the result to come out in mid March?
Why do Calyle and Riverstone hold exactly the same share count? That must be some kind of duplicate.

I just pulled the holders list straight from Bloomberg, and sometimes there are errors in the data. I don't have a view/position on SD, but wanted to help out.
Title: Re: SD - SandRidge Energy
Post by: berkshiremystery on February 15, 2013, 10:16:01 AM
Thanks a lot! Looks like you have already done the homework! So we would expect the result to come out in mid March?
Why do Calyle and Riverstone hold exactly the same share count? That must be some kind of duplicate.

I just pulled the holders list straight from Bloomberg, and sometimes there are errors in the data. I don't have a view/position on SD, but wanted to help out.

There you go....

http://holdings.nasdaq.com/asp/Institutional.asp?FormType=Institutional&symbol=SD&Selected=SD
Title: Re: SD - SandRidge Energy
Post by: sampr01 on February 15, 2013, 10:32:58 AM
ISS recommends removing SandRidge board, Bloomberg reports
Title: Re: SD - SandRidge Energy
Post by: hellsten on February 15, 2013, 10:41:28 AM
Does anyone have a detailed breakdown of the major shareholders?

See attached...

Thanks. Looks like Allan Mecham bought 1806134 shares in Q4 2012. ~$10 million…

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/the-400-man!/
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 15, 2013, 11:11:40 AM
Thanks a lot! Looks like you have already done the homework! So we would expect the result to come out in mid March?
Why do Calyle and Riverstone hold exactly the same share count? That must be some kind of duplicate.

I just pulled the holders list straight from Bloomberg, and sometimes there are errors in the data. I don't have a view/position on SD, but wanted to help out.

There you go....

http://holdings.nasdaq.com/asp/Institutional.asp?FormType=Institutional&symbol=SD&Selected=SD

This data is the same as the excel file that thomcapital pulled out. I am very confused.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 15, 2013, 11:21:45 AM
Does anyone have a detailed breakdown of the major shareholders?

See attached...

Thanks. Looks like Allan Mecham bought 1806134 shares in Q4 2012. ~$10 million…

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/the-400-man!/

Thanks a lot! Where did you get that data? From sec.gov, I searched for Arlington Value Management, and couldn't find anything like 13HR.
That sounds amazing given the fund only has 20 M under management currently.

Oh...... I just realized that the original post is pretty old. Do you know the current size of this fund?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 15, 2013, 07:51:38 PM
ISS recommends removing SandRidge board, Bloomberg reports

Will be interesting to see how FFH will vote. In FBK case, they own big chunk of RFP and FBK's management didn't delivery, so they logically support RFP over MERC's.

Now what...
Title: Re: SD - SandRidge Energy
Post by: Clestor on February 18, 2013, 07:57:45 AM
Riverstone/Carlyle Energy Partners IV, L.P. owns 51,370,888 shares of Sandridge. 

http://www.sec.gov/Archives/edgar/data/1349436/000119312512171010/d337799dsc13g.htm

The holdings lists posted previously from Bloomberg and NASDAQ are double-counting this position.

Title: Re: SD - SandRidge Energy
Post by: muscleman on February 18, 2013, 08:13:06 AM
Riverstone/Carlyle Energy Partners IV, L.P. owns 51,370,888 shares of Sandridge. 

http://www.sec.gov/Archives/edgar/data/1349436/000119312512171010/d337799dsc13g.htm

The holdings lists posted previously from Bloomberg and NASDAQ are double-counting this position.

That is for April 2012. I think they no longer have the position.
http://www.riverstonellc.com/Investments.aspx

For any hedge funds or mutual funds that don't have a long lockup period, I think they will all vote for yes for the immediate gain. Otherwise there would be too much pressure from their investors.

For firms like FFH that has permanent capital, they can afford to wait longer, so they have  the chance to vote no.
Retail investors may vote yes or no, and they may even be confused about the green card vs the white card. So there is some uncertainty here on the retail side.

I think the total hedge fund + mutual fund ownership is over 40%? (Excluding Riverstone and FFH) Then the chance to pass the vote is pretty high.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 18, 2013, 09:00:25 AM
So, I want SD to fix the issues that TPG raised, but I am not sure about some of its candidates TPG proposed.

TW would have been a hero if Miss plays out as hoped. (i.e. 100%+ IRR, not 40%.)

So I am not sure what to do, and no action means supporting existing management. But a close but defeating vote will also send the signal.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 19, 2013, 07:52:35 AM
So, I want SD to fix the issues that TPG raised, but I am not sure about some of its candidates TPG proposed.

TW would have been a hero if Miss plays out as hoped. (i.e. 100%+ IRR, not 40%.)

So I am not sure what to do, and no action means supporting existing management. But a close but defeating vote will also send the signal.

Do you see any sign that TW would address those issues? I only see that they blatantly denied all issues.
Regarding operations, this is not offshore. How difficult is it to operate the land drilling? I think even if we replace TW with a monkey, it is better for the shareholders. ;)
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 19, 2013, 08:30:00 AM
Boy, is the mud fly'in today on the newswires TPG vs. SD/TW.
Even the proxy firms are joining in....

http://finance.yahoo.com/news/egan-jones-recommends-sandridge-stockholders-141200867.html
(http://us.123rf.com/400wm/400/400/texelart/texelart1112/texelart111200017/11790791-businessmen-in-a-boxing-match.jpg)
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 19, 2013, 10:55:35 AM
Boy, is the mud fly'in today on the newswires TPG vs. SD/TW.
Even the proxy firms are joining in....

http://finance.yahoo.com/news/egan-jones-recommends-sandridge-stockholders-141200867.html

Yeah this is getting funny. After ISS recommended voting for TPG's plan last Friday, TW found this random firm that recommends rejection of the TPG's plan, but the reason for the rejection is quite funny. It does not mention anything about TPG's allegations. I think it is a pretty weak one.

The result will come out in Mid-March, right? If TPG fails, can it reassemble another vote soon? I think hedge funds are taking this opportunity to buy more, up to the 10% limit. Then they can reassemble another vote and make even more money in that way, no?
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 19, 2013, 11:13:03 AM
I think the vote goes "green", there are enough dis-satisfied holders out there to side with TPG. I'm no expert on Delaware law, but I think TPG can put forward another slate of directors.
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 19, 2013, 11:53:22 AM
I think the vote goes "green", there are enough dis-satisfied holders out there to side with TPG. I'm no expert on Delaware law, but I think TPG can put forward another slate of directors.

As I said, even if the entire board plus TW are replaced with monkeys, shareholders are probably better off. Why? Because the business is so easy that it doesn't need a highly paid "genius" to run it. So the argument that TPG's proposed new members are inexperienced is weak. A board of monkeys will do more benefits than the current toxic and corrupted board.
Title: Re: SD - SandRidge Energy
Post by: longlake95 on February 19, 2013, 12:06:43 PM
Agreed!!!
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 19, 2013, 01:40:14 PM
I have this feeling that TW is in tight with this one.  Sentiment seems to reside with removing him.  I'll start a poll.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: sampr01 on February 19, 2013, 01:57:27 PM
Sanjeev

Do you have any stake in SD...

thanks
I have this feeling that TW is in tight with this one.  Sentiment seems to reside with removing him.  I'll start a poll.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 19, 2013, 02:15:45 PM
Sanjeev

Do you have any stake in SD...

thanks
I have this feeling that TW is in tight with this one.  Sentiment seems to reside with removing him.  I'll start a poll.  Cheers!

Yes, we bought a nice slug on Thursday, after long deliberation and trying to make sense of all of this.  We won't get to vote, but I think the assets are undervalued...the best I can tell...and markets will be pleased with whatever way the vote ends up going.  They should have plenty of cash after completion of the Sandridge E&P sale, so that sort of took care of one of my qualms for a long-time. 

I'm somewhat agnostic on Tom...I like the guy and his abilities, but I'm not keen on his compensation or the numerous related party/conflict of interest deals.  If you look at it in terms of "Could the reputation and ethics be beyond reproach, if they took this manner of compensation and removed the sweet-heart deals?"  The natural prelude to that question is then "wouldn't any shareholder or ethical CEO want that?" 

Maybe removing Tom is not such a great idea, but I think adding other voices to the board is almost dutifully warranted if that is what we expect from CEO's at Berkshire or Fairfax, and the CEO's of any other company we invest in.  Buffett and his kind have set the bar very high...maybe too high...but it is now set there.  That may be at the peril of other CEO's!  Cheers!
Title: Re: SD - SandRidge Energy
Post by: wisdom on February 19, 2013, 10:59:16 PM
Impact of shale on oil prices and renewables - pwc study

http://www.guardian.co.uk/environment/2013/feb/14/shale-oil-threat-renewables-pwc

Title: Re: SD - SandRidge Energy
Post by: Cardboard on February 20, 2013, 06:51:01 AM
What is your target price under the following scenarios and assuming no change to current energy prices?

1- The company is sold.
2- The assets are all sold but, separately.
3- New management is put in place and the company is run to maximize free cash flow.

I have not had much luck with what appeared to be cheap oil & gas companies in the past. Although, they were smaller than SD which should help with unexpected negative surprises on depletion or exploration. So I am kind of lazy here and would like your opinions on upside potential before digging much deeper into SD.  ::)

Cardboard
Title: Re: SD - SandRidge Energy
Post by: nestorius on February 20, 2013, 03:10:49 PM
*GLASS LEWIS RECOMMENDS REMOVING SIX SANDRIDGE DIRECTORS  :SD US
*GLASS LEWIS RECOMMENDATIONS ON SANDRIDGE IN REPORT       :SD US
*SANDRIDGE BOARD 'IN NEED OF NEW PERSPECTIVE' GLASS LEWIS SAYS
*GLASS LEWIS CITES LAND DEALS WITH SANDRIDGE CEO'S FAMILY :SD US

I'm sure TPG-Axon will be out with a press release shortly. With ISS and G-L in hand, you can probably tally most if not all of the more passive holders onto TPG's side.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on February 20, 2013, 03:13:32 PM
glass report
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 20, 2013, 09:14:07 PM
Sanjeev

Do you have any stake in SD...

thanks
I have this feeling that TW is in tight with this one.  Sentiment seems to reside with removing him.  I'll start a poll.  Cheers!

Yes, we bought a nice slug on Thursday, after long deliberation and trying to make sense of all of this.  We won't get to vote, but I think the assets are undervalued...the best I can tell...and markets will be pleased with whatever way the vote ends up going.  They should have plenty of cash after completion of the Sandridge E&P sale, so that sort of took care of one of my qualms for a long-time. 

I'm somewhat agnostic on Tom...I like the guy and his abilities, but I'm not keen on his compensation or the numerous related party/conflict of interest deals.  If you look at it in terms of "Could the reputation and ethics be beyond reproach, if they took this manner of compensation and removed the sweet-heart deals?"  The natural prelude to that question is then "wouldn't any shareholder or ethical CEO want that?" 

Maybe removing Tom is not such a great idea, but I think adding other voices to the board is almost dutifully warranted if that is what we expect from CEO's at Berkshire or Fairfax, and the CEO's of any other company we invest in.  Buffett and his kind have set the bar very high...maybe too high...but it is now set there.  That may be at the peril of other CEO's!  Cheers!

Do you think it is possible that Prem has not done his due diligence on SD before buying so many shares? I think it is very unlikely.
But why did he buy with the facts in mind that TW has done a lot of things that hurt the shareholders, and kept quite for so long? He started buying SD since a few years ago.
If TPG didn't stand up for the fight, will FFH tolerate TW for a few more years?
You can say that recently Prem said he backs TW up but maybe he had some private talks with TW to ask him to clean the shit up. But why didn't he start the private talks with TW a few years ago? If he did tell TW to correct himself a few years ago and things didn't improve for a few years, why would he still back up TW?
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 23, 2013, 02:41:02 PM
What is your target price under the following scenarios and assuming no change to current energy prices?

1- The company is sold.
2- The assets are all sold but, separately.
3- New management is put in place and the company is run to maximize free cash flow.

I have not had much luck with what appeared to be cheap oil & gas companies in the past. Although, they were smaller than SD which should help with unexpected negative surprises on depletion or exploration. So I am kind of lazy here and would like your opinions on upside potential before digging much deeper into SD.  ::)

Cardboard

The assets are worth at least double what they are trading for.  Under any of those circumstances, the stock moves up 50% quickly.  I think Tom is out based on sentiment.  How can we as Berkshire and Fairfax shareholders justify some of the points brought up by TPG?  I suspect without immediate changes they lose this proxy.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Cardboard on February 24, 2013, 09:12:15 AM
Thanks Sanjeev.

Wasn't Tom Ward who was at a Fairfax shareholders meeting a few years back? Didn't he have dinner with you guys too and Francis Chou?

I would imagine that he had been invited by Prem. I would understand Prem to be loyal to his friends and business partners, but he must feel betrayed by now if these allegations are anywhere close to the truth. It will be interesting to see how he reacts. If he keeps supporting him then I will feel very confused.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: berkshiremystery on February 24, 2013, 09:29:02 AM
Thanks Sanjeev.

Wasn't Tom Ward who was at a Fairfax shareholders meeting a few years back? Didn't he have dinner with you guys too and Francis Chou?

I would imagine that he had been invited by Prem. I would understand Prem to be loyal to his friends and business partners, but he must feel betrayed by now if these allegations are anywhere close to the truth. It will be interesting to see how he reacts. If he keeps supporting him then I will feel very confused.

Cardboard

Cardboard,...

Of course Tom Ward was at last years FFH shareholders dinner...
http://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/two-days-in-toronto-fairfax-dinner-fairfax-agm/msg75606/#msg75606
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 24, 2013, 12:15:24 PM
Thanks Sanjeev.

Wasn't Tom Ward who was at a Fairfax shareholders meeting a few years back? Didn't he have dinner with you guys too and Francis Chou?

I would imagine that he had been invited by Prem. I would understand Prem to be loyal to his friends and business partners, but he must feel betrayed by now if these allegations are anywhere close to the truth. It will be interesting to see how he reacts. If he keeps supporting him then I will feel very confused.

Cardboard

Tom hasn't done anything unethical.  He's just overcompensated, and boards have agreed to that compensation, including things like the well participation program that they had at Chesapeake and now at SD.  That's no different than the hundreds of other companies where CEO's feel they should get what they deserve. 

If blame belongs anywhere, it belongs with the board of directors for not doing their job...in particular the compensation committee.  And that's the risk you take as a CEO, because if your compensation isn't in line with performance, then you risk having a revolt by the shareholders.   SD is now feeling that wrath, started by TPG...and in my opinion, rightfully so...when you examine the compensation structure versus the industry, and the fact the board allowed these conflicts of interest to permeate the business.  This will end how it should end...with a shareholder vote.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Cardboard on February 24, 2013, 02:23:35 PM
Well Sanjeev, I have to disagree. If he bought land adjacent to SD for next to nothing, then let SD take all the risks of proving reserves on their own land and developing infrastructure that Tom's land could eventually benefit from knowing and making all the decisions about such effort then it sounds to me like a major conflict of interest and highly unethical.

On top of that, some parcels apparently have been bought then resold quickly to SD at much higher prices. Smells pretty bad to me. Not the kind of guy that is willing to eat the same returns offered to SD shareholders. There is CEO compensation, but this is something totally different. Even worst than insider trading if there is some truth to it.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: txlaw on February 24, 2013, 03:22:52 PM
Cardboard, what you just articulated is what makes me most wary of TW. 

I have invested in SD based purely on NAV, but frankly in the past I've been reluctant to invest in the company because of TW's involvement (the analogies to Aubrey McClendon at CHK are apparent).  And some of TPG-Axon's allegations about WCT Resources are pretty serious -- it smells like Ward's family is usurping a corporate opportunity from SD and its public shareholders.  Or at the very least it seems a lot like the Sokol affair.

The following presentation is quite disturbing:
http://www.shareholdersforsandridge.com/wp-content/uploads/2013/02/SandRidge-Related-Party-Transactions-Presentation-2.pdf

However, as I'm not an O&G expert, I confess I'm not aware if there are any legitimate reasons for why those transactions would have been completed as such.  Can anyone come up with any good explanations for these transactions?
Title: Re: SD - SandRidge Energy
Post by: stylized_fact on February 24, 2013, 03:27:39 PM
Do any board members have an opinion on the SandRidge trusts relative to the common? 
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 25, 2013, 12:32:18 AM
Well Sanjeev, I have to disagree. If he bought land adjacent to SD for next to nothing, then let SD take all the risks of proving reserves on their own land and developing infrastructure that Tom's land could eventually benefit from knowing and making all the decisions about such effort then it sounds to me like a major conflict of interest and highly unethical.

On top of that, some parcels apparently have been bought then resold quickly to SD at much higher prices. Smells pretty bad to me. Not the kind of guy that is willing to eat the same returns offered to SD shareholders. There is CEO compensation, but this is something totally different. Even worst than insider trading if there is some truth to it.

Cardboard

The parcels were bought within an entity that Tom is not directly associated with, even though one of his children is.  The properties were sold to SD...should the board not have stopped this?  You have three layers of oversight at every corporation...the CEO, then the board, then the shareholders.  This isn't all on Tom's shoulders, even though he's bright enough to have known that this was straddling the line.  As Buffett says to his managers, if you think you are close to the line, then you obviously should not act on it.  Now the third line of oversight is acting.  Cheers! 
Title: Re: SD - SandRidge Energy
Post by: oldye on February 25, 2013, 03:13:21 AM
mobile.bloomberg.com/news/2013-02-25/sinopec-to-buy-chesapeake-oil-and-gas-assets-for-1-02-billion

Seems kinda cheap
Title: Re: SD - SandRidge Energy
Post by: bmichaud on February 25, 2013, 07:01:13 AM
$2,400 per acre - I'd say so...
Title: Re: SD - SandRidge Energy
Post by: hellsten on February 25, 2013, 07:17:29 AM
Quote
According to page 3 of Chesapeake's most recent investor presentation the company believes that the Mississippi Lime acreage is worth $7,000 to $8,000 per acre. If you assume that Chesapeake sells 25% of its two million acres that would imply monetization proceeds of 500,000 x $7,500 = $3.75 billion.

Source:
http://seekingalpha.com/article/655341-a-look-at-a-potential-chesapeake-mississippi-lime-joint-venture
http://www.scribd.com/doc/96735489/Chk-June-2012-Presentation
Title: Re: SD - SandRidge Energy
Post by: berkshiremystery on February 25, 2013, 07:24:40 AM
Have you guys noticed, there was a huge block trade of 10,000 contracts on the Jan2014 leaps @ $3.
I personally think it seems compelling to write 2014/15 puts for $0.95 or 1.40 @ the $5 strike to lower costs and to earn some income on the sidelines. Only disadvantage, some capital would be tied up as collateral.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on February 25, 2013, 07:44:26 AM
In the TPG valuation of SandRidge
They put 4.5B valuation to the current production.
I think SinoPec also acquired some current production, and therefore their 1B acquisition may indicate that they pay almost zero for land itself. Correct me if I am wrong.

Anyway, we all know CHK is on fire sale. So this is the floor instead of the ceil

/plato1977

$2,400 per acre - I'd say so...
Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on February 25, 2013, 08:08:09 AM
http://www.bloomberg.com/news/2013-02-25/sinopec-to-buy-chesapeake-oil-and-gas-assets-for-1-02-billion.html

Quote
The transaction includes wells that were pumping the equivalent of 34,000 barrels of crude a day during the final three months of 2012, according to Chesapeake’s statement. The per-acre price lags the $4,425 and $2,750 SandRidge Energy Inc. (SD) received in successive Mississippi Lime deals in 2011, said Michael Kelly, an analyst at Global Hunter Securities LLC in Houston. Neither of the SandRidge sales included producing wells, he said.

“Our reaction to this is pretty negative,” Kelly said in a telephone interview today. “This suggests liquidity is trumping everything for the company.”
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 25, 2013, 08:53:40 AM
http://www.bloomberg.com/news/2013-02-25/sinopec-to-buy-chesapeake-oil-and-gas-assets-for-1-02-billion.html

Quote
The transaction includes wells that were pumping the equivalent of 34,000 barrels of crude a day during the final three months of 2012, according to Chesapeake’s statement. The per-acre price lags the $4,425 and $2,750 SandRidge Energy Inc. (SD) received in successive Mississippi Lime deals in 2011, said Michael Kelly, an analyst at Global Hunter Securities LLC in Houston. Neither of the SandRidge sales included producing wells, he said.

“Our reaction to this is pretty negative,” Kelly said in a telephone interview today. “This suggests liquidity is trumping everything for the company.”

So this immediately place TPG's plan to sell the company at $10-12 per share in jeopardy, no?
However, I think it is still a good idea to replace TW and then just drill Missisipian Lime for the long term, isn't it?
Title: Re: SD - SandRidge Energy
Post by: nestorius on February 25, 2013, 10:05:08 AM
UBS commentary around deal metrics (underline mine), Canaccord quotes similar implied $400 - $800/acre for undeveloped. It does put a bit of a damper on the possibility that TPG will be able to sell SD at an attractive valuation within 2013.

CHK monetized Horizontal Miss for $1.02 billion
CHK has agreed to sell a 50% interest in its core Horizontal Mississippi Lime
position to Sinopec for $1.02 billion. CHK will be divesting 425,000 net acres, 23
MBoed net, and 70 MMBoe of net proved reserves. While CHK disclosed 4Q
production averaged 34 MBoed (45% oil, 9% NGLs), Sinopec noted the
production on the acreage had climbed to 46 MBoed at YE12.
No change to CHK est but long road ahead to meet disposition target
This deal enables $1 billion of CHK’s targeted 2013 asset sales of $4-7 billion.
Assuming a 2Q close, CHK is divesting 28 Bcfe of the 35 Bcfe of production
(80%) associated with planned asset sales. Thus, the remaining $3-$6 billion of
asset sales will have to come largely from undeveloped acreage at a time the
market seems to be paying less for acreage deals, e.g., note the disappointing CHK
Permian deal prices, PXD’s failed Barnett deal, and lengthy time MRO, HES, and
MHR have had Eagle Ford packages on the market.
CHK’s Horiz Miss deal valuation a negative read through for SD
Valuing 23 MBoed of net production at $50,000/Boed implies no value for the
undeveloped acreage. Assuming 17 MBoed of net production, it implies just $400
per undeveloped acre. This is well below the $1,320/acre assumed in our SD NAV.
Applying these metrics values SD’s NAV at ~$3.45-$6 per share.
Title: Re: SD - SandRidge Energy
Post by: Packer16 on February 26, 2013, 05:29:04 AM
I guess the question is this sale a distressed sale and does TPG have a team to operate SD if can't be sold right away.  Also, I have seen some of the analyst lower theie NAV even before the sale to closer to $6.00 per share based upon the latest well tests (quite a change as the higher SD was predicated on a high NAV estimated to be in the high teens per share previously).  It would be interesting if FFH nominated its own board or put some of its principles on the ballot for election.  This would put more balance on the board.


Packer
Title: Re: SD - SandRidge Energy
Post by: ASTA on February 26, 2013, 07:08:21 AM
Bought 95% of my allotment of 7% of the portfolio yesterday and today at 5.57.
33% cash now what else to buy :D
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 26, 2013, 02:04:05 PM
Sandridge closes $2.6B Permian sale, and is retiring over $1.1B in debt.  Love it!  Cheers!

http://finance.yahoo.com/news/sandridge-energy-inc-closes-sale-210500000.html
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 26, 2013, 02:29:20 PM
Sandridge closes $2.6B Permian sale, and is retiring over $1.1B in debt.  Love it!  Cheers!

http://finance.yahoo.com/news/sandridge-energy-inc-closes-sale-210500000.html

Prasad, due to the recently CHK's Missisipian sale, I don't think TPG's original plan to sell SD for $10-12 a share would work anymore. However I still think the board should be removed.
Suppose the consent fails, TPG can always do another round of consent with more nominees who has oil and gas experience, right?
I see current nominees have minimum oil and gas experience because TPG wants to sell the company, but I think that is a fixable issue if TPG decides to develop the company for the longer term. What do you think?
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 26, 2013, 02:38:06 PM
Sandridge closes $2.6B Permian sale, and is retiring over $1.1B in debt.  Love it!  Cheers!

http://finance.yahoo.com/news/sandridge-energy-inc-closes-sale-210500000.html

Prasad, due to the recently CHK's Missisipian sale, I don't think TPG's original plan to sell SD for $10-12 a share would work anymore. However I still think the board should be removed.
Suppose the consent fails, TPG can always do another round of consent with more nominees who has oil and gas experience, right?
I see current nominees have minimum oil and gas experience because TPG wants to sell the company, but I think that is a fixable issue if TPG decides to develop the company for the longer term. What do you think?

There is no reason to sell SD if the pricing is not good due to the CHK sale.  With the $2.6B in cash, and a reduction in capital expenditures, they can remain profitable for years with a solid balance sheet.  CHK needs the money...SD does not. 

With prudent management, be it TPG or the right guidance with Ward still under control, there is no reason why this cannot be a profitable business.  They have good assets, good cash flows, and now a pretty solid balance sheet with maturities not due for a few years.  They also have a shareholder with very deep pockets if the need ever arrived.  Cheers! 
Title: Re: SD - SandRidge Energy
Post by: tombgrt on February 26, 2013, 02:46:12 PM
Interesting developments here. Thanks for all the great posts these last few months.

I'm getting interested. Possible downside is getting smaller, better liquidity and the potential cataylsts are plentiful (TW, more asset sales, ...). Even if TW stays, Prem is surely putting pressure on him to get his act straight. Activists can always go for round two if this try fails.
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 26, 2013, 02:50:19 PM
Interesting developments here. Thanks for all the great posts these last few months.

I'm getting interested. Possible downside is getting smaller, better liquidity and the potential cataylsts are plentiful (TW, more asset sales, ...). Even if TW stays, Prem is surely putting pressure on him to get his act straight. Activists can always go for round two if this try fails.

It will be very interesting in Toronto this year.  I think for those attending, you could get some hear very good Q&A, both at the AGM and our dinner.  With RIMM, SD, FBK, OSTK, end of the lawsuit, all the cash and market highs, lots to talk about with Prem!  Cheers!
Title: Re: SD - SandRidge Energy
Post by: racemize on February 26, 2013, 03:41:30 PM
Interesting developments here. Thanks for all the great posts these last few months.

I'm getting interested. Possible downside is getting smaller, better liquidity and the potential cataylsts are plentiful (TW, more asset sales, ...). Even if TW stays, Prem is surely putting pressure on him to get his act straight. Activists can always go for round two if this try fails.

It will be very interesting in Toronto this year.  I think for those attending, you could get some hear very good Q&A, both at the AGM and our dinner.  With RIMM, SD, FBK, OSTK, end of the lawsuit, all the cash and market highs, lots to talk about with Prem!  Cheers!

I'm missing it this year to attend Berkshire's for the first time--you guys better post some good notes!  ;)
Title: Re: SD - SandRidge Energy
Post by: bmichaud on February 26, 2013, 03:53:27 PM
I challenge anyone to post a cash flow-based valuation model that gets anywhere near what tpg says sd is worth...

Tpg assumes a heroic debt-paydown plan and a "growth company" multiple of 8x operating cash flow. Wtf would sd ever be worth 8x operating cash flow? I'm not even sure it is worth 8x normalized fcf.

This is fantasy-based valuation, imo.
Title: Re: SD - SandRidge Energy
Post by: ShahKhezri on February 26, 2013, 04:04:11 PM
Yeah but that debt payment is a what-if...there's absolutely no way SD would paydown all debt considering the early debt/redemption costs associated with that.  I dont think the valuation is 200-300% higher...but I do think 40-50% is about right.
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 26, 2013, 04:54:37 PM
Yeah but that debt payment is a what-if...there's absolutely no way SD would paydown all debt considering the early debt/redemption costs associated with that.  I dont think the valuation is 200-300% higher...but I do think 40-50% is about right.

I don't think 200-300% either, but I think it is feasible to see 100-150% based on the values assigned to the Permian sale.  Obviously those values won't happen at this point with the prices that CHK let property go for, but as long as SD is in no need of liquidity, they can wait till valuations are better.  Cheers! 
Title: Re: SD - SandRidge Energy
Post by: muscleman on February 26, 2013, 06:17:58 PM
Yeah but that debt payment is a what-if...there's absolutely no way SD would paydown all debt considering the early debt/redemption costs associated with that.  I dont think the valuation is 200-300% higher...but I do think 40-50% is about right.

I don't think 200-300% either, but I think it is feasible to see 100-150% based on the values assigned to the Permian sale.  Obviously those values won't happen at this point with the prices that CHK let property go for, but as long as SD is in no need of liquidity, they can wait till valuations are better.  Cheers!

Agree. Especially if gas prices goes up in 2 years. How about litigation? Maybe TPG will help current shareholders sue WCT resources and TW, and get some money back? ;D
Title: Re: SD - SandRidge Energy
Post by: bmichaud on February 26, 2013, 07:00:27 PM
The permian sale was mature acreage with 80% oil. Miss Lime is highly undeveloped and less than 50% oil. And if SD waits, according to Deutsche Bank, they face the prospect of declining domestic oil prices down to marginal cost of $80...
Title: Re: SD - SandRidge Energy
Post by: nwoodman on February 26, 2013, 07:19:49 PM
The permian sale was mature acreage with 80% oil. Miss Lime is highly undeveloped and less than 50% oil. And if SD waits, according to Deutsche Bank, they face the prospect of declining domestic oil prices down to marginal cost of $80...

Good point.  Can you provide a link or post the DB report?
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on February 27, 2013, 04:28:56 AM

Mississippi Lime deals:

http://seekingalpha.com/article/1228331-chesapeake-asset-sale-provides-ugly-data-point-for-sandridge-shareholders?source=email_rt_article_title
Title: Re: SD - SandRidge Energy
Post by: bmichaud on February 27, 2013, 06:58:49 AM
The permian sale was mature acreage with 80% oil. Miss Lime is highly undeveloped and less than 50% oil. And if SD waits, according to Deutsche Bank, they face the prospect of declining domestic oil prices down to marginal cost of $80...

Good point.  Can you provide a link or post the DB report?
Title: Re: SD - SandRidge Energy
Post by: tombgrt on February 27, 2013, 06:05:51 PM
Interesting developments here. Thanks for all the great posts these last few months.

I'm getting interested. Possible downside is getting smaller, better liquidity and the potential cataylsts are plentiful (TW, more asset sales, ...). Even if TW stays, Prem is surely putting pressure on him to get his act straight. Activists can always go for round two if this try fails.

It will be very interesting in Toronto this year.  I think for those attending, you could get some hear very good Q&A, both at the AGM and our dinner.  With RIMM, SD, FBK, OSTK, end of the lawsuit, all the cash and market highs, lots to talk about with Prem!  Cheers!

Very interesting indeed! If I ever get to Canada (my gf and I love travel and Canada is definitely on our to do-list ;)), I'll make sure the holiday falls in sync with the meeting so that I can attend at least once. :)



OT: Have been looking into SD more yesterday and tonight and I can't get comfortable at any level. It's a much bigger mess than I thought but I guess that's what creates possible opportunity here. I also can't get any real grip on valuation and with stock markets and commodities at current levels, I don't feel bad leaving my cash untouched or in FFH until we get obvious bargains all around once more. Oh and after all, I still have FTP to deal with... I'm not sure I could handle two promotional CEO's and their big ego's! :D Good luck all with this one!
Title: Re: SD - SandRidge Energy
Post by: sampr01 on February 28, 2013, 01:55:56 PM
SD results..loss $301 mil
 >:(

http://www.reuters.com/article/2013/02/28/sandridge-results-idUSL1N0BSID120130228?feedType=RSS&feedName=marketsNews&rpc=43
Title: Re: SD - SandRidge Energy
Post by: Parsad on February 28, 2013, 04:02:29 PM
SD results..loss $301 mil
 >:(

http://www.reuters.com/article/2013/02/28/sandridge-results-idUSL1N0BSID120130228?feedType=RSS&feedName=marketsNews&rpc=43

If you exclude the impairment, then the quarter wasn't bad at all.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on February 28, 2013, 04:44:43 PM
http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-presentations

Type curve lowered again.. lowered from from Nov 12 ....YE12...... lower slightly in only 1 month

Hope it goes down to four.
Title: Re: SD - SandRidge Energy
Post by: thecynic on March 02, 2013, 08:32:42 PM
http://preview.tinyurl.com/dy84xxd

Quote
Doug Leggate, an analyst for Bank of America Merrill Lynch, said Chesapeake's sales price is not as bad as it looks and that the dire analyst warnings are "flawed."

He said the price Chesapeake received is based on the number of rigs the company has looking for oil and natural gas in the Mississippi Lime.

Because of funding and budget constraints, Chesapeake has reduced its rig count in the area to eight. At that level of drilling activity, Leggate said, the play is worth about $3,500 an acre on a fully developed basis. At 40 rigs -- the amount SandRidge is using -- the area would be worth $10,000 an acre, he said.

"There is no other way to summarize Chesapeake's much anticipated JV deal in the Mississippi Lime other than to acknowledge that headline metrics looked disappointing -- at least versus other transactions in the play that had broadly set expectations," Leggate wrote Wednesday.

Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 02, 2013, 08:45:18 PM
I don't get the logic here.
Whether it's based on rig count or not, CHK sold that acre @ 1B


http://preview.tinyurl.com/dy84xxd

Quote
Doug Leggate, an analyst for Bank of America Merrill Lynch, said Chesapeake's sales price is not as bad as it looks and that the dire analyst warnings are "flawed."

He said the price Chesapeake received is based on the number of rigs the company has looking for oil and natural gas in the Mississippi Lime.

Because of funding and budget constraints, Chesapeake has reduced its rig count in the area to eight. At that level of drilling activity, Leggate said, the play is worth about $3,500 an acre on a fully developed basis. At 40 rigs -- the amount SandRidge is using -- the area would be worth $10,000 an acre, he said.

"There is no other way to summarize Chesapeake's much anticipated JV deal in the Mississippi Lime other than to acknowledge that headline metrics looked disappointing -- at least versus other transactions in the play that had broadly set expectations," Leggate wrote Wednesday.
Title: Re: SD - SandRidge Energy
Post by: thecynic on March 02, 2013, 08:59:55 PM
I don't get the logic here.
Whether it's based on rig count or not, CHK sold that acre @ 1B

I think there are several advantages to having more rigs, so the pricing would have to be different based on # of rigs:
1) Proportionally more of the leased acreage can be put towards generating cash.
2) Quicker and hence ultimately higher rate of returns. With more wells, more oil can be pumped.
3) Helps lower well costs because drilling can be done close together so that company has to spend less on Water disposal, roads, electricity etc infrastruture.

Of course, if a company is cash strapped, more rigs are a problem because the company would have to spend more for drilling.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 02, 2013, 09:05:08 PM
I agree. But certainly it's not proportional to the rig count
On the other hand, I agree that for CHK this is more like a distressed sale. They had few choices I guess
What's depressing SD now is probably the lower oil percentage in MISS according to more recent data.
Don't see a short term catalyst for this baby - don't want to add if no catalyst

I don't get the logic here.
Whether it's based on rig count or not, CHK sold that acre @ 1B

I think there are several advantages to having more rigs, so the pricing would have to be different based on # of rigs:
1) Proportionally more of the leased acreage can be put towards generating cash.
2) Quicker and hence ultimately higher rate of returns. With more wells, more oil can be pumped.
3) Helps lower well costs because drilling can be done close together so that company has to spend less on Water disposal, roads, electricity etc infrastruture.

Of course, if a company is cash strapped, more rigs are a problem because the company would have to spend more for drilling.
Title: Re: SD - SandRidge Energy
Post by: Palantir on March 02, 2013, 10:11:23 PM
Any of you guys holdig SDT or SDR? I'm waiting for their annual report to see what their PV-10 is.
Title: Re: SD - SandRidge Energy
Post by: hellsten on March 05, 2013, 02:22:10 PM
SandRidge Energy 2013 Investor/Analyst Meeting:
http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-presentations
Title: Re: SD - SandRidge Energy
Post by: nestorius on March 05, 2013, 02:39:35 PM
TPG-Axon up to 7.3% - 36.2 million shares.

http://www.sec.gov/Archives/edgar/data/1349436/000090266413001332/p13-0907sc13da.htm
Title: Re: SD - SandRidge Energy
Post by: PlanMaestro on March 05, 2013, 06:40:22 PM
Any of you guys holdig SDT or SDR? I'm waiting for their annual report to see what their PV-10 is.

I think it includes the Permian trust.

(http://farm9.staticflickr.com/8507/8532148325_1dc9b9c049.jpg)
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 05, 2013, 08:41:47 PM
I listened to a few sections of the call, it's great team.
Title: Re: SD - SandRidge Energy
Post by: Zorrofan on March 06, 2013, 02:44:03 PM
SD held their 2013 Investor day......

Presentation:
http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-presentations

Transcript:
http://seekingalpha.com/article/1249251-sandridge-energy-s-ceo-hosts-2013-investor-analyst-meeting-conference-transcript

enjoy! Looking forward to March 15th results, should be interesting!!

cheers
Zorro
Title: Re: SD - SandRidge Energy
Post by: ericd1 on March 06, 2013, 06:18:52 PM
Z Thanks for sharing. The proforma book value is impressive. 
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 09, 2013, 12:55:14 PM
TPG Wins Injunction...Sandridge cannot bar TPG from running proxy to remove entire board:

http://www.bloomberg.com/news/2013-03-08/sandridge-investors-win-injunction-in-proxy-fight-case.html?cmpid=yhoo

Cheers!
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 10, 2013, 08:57:42 AM
SD held their 2013 Investor day......

Presentation:
http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-presentations

Transcript:
http://seekingalpha.com/article/1249251-sandridge-energy-s-ceo-hosts-2013-investor-analyst-meeting-conference-transcript

enjoy! Looking forward to March 15th results, should be interesting!!

cheers
Zorro

Pro forma net asset value per share is over $31, but most of it is based on projected value. Does anyone believe what TW says? What could be the true net asset value?
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 10, 2013, 09:43:36 AM
TPG Wins Injunction...Sandridge cannot bar TPG from running proxy to remove entire board:

http://www.bloomberg.com/news/2013-03-08/sandridge-investors-win-injunction-in-proxy-fight-case.html?cmpid=yhoo

Cheers!

Nice! Well, I think even if TPG loses the proxy fight, the assets are so undervalued that we will probably do ok in the long term. Let's say they lose and share price tank to $4, then it would become so undervalued that it doesn't matter that TW and his board sucks some blood from the shareholders every year.
If that really happens, do you think TPG can call for another round of vote? At that time, retail investors would be scared out, and these funds would have the chance to acquire more than 50% of the stakes on their own and do not rely on retail side's vote to determine the result.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 10, 2013, 09:56:27 AM
Is SD really that cheap ?
According to SD 's own estimation, its value based on proved reserve is not that big.
See this article:
http://seekingalpha.com/article/1255201-sandridge-energy-value-gap-not-obvious-leverage-remains-a-challenge

ppl are probably betting on its huge unproved reserve. This is hard to prove in the short term, and to prove it you need lots of drilling and lots of capital expenditure.


TPG Wins Injunction...Sandridge cannot bar TPG from running proxy to remove entire board:

http://www.bloomberg.com/news/2013-03-08/sandridge-investors-win-injunction-in-proxy-fight-case.html?cmpid=yhoo

Cheers!

Nice! Well, I think even if TPG loses the proxy fight, the assets are so undervalued that we will probably do ok in the long term. Let's say they lose and share price tank to $4, then it would become so undervalued that it doesn't matter that TW and his board sucks some blood from the shareholders every year.
If that really happens, do you think TPG can call for another round of vote? At that time, retail investors would be scared out, and these funds would have the chance to acquire more than 50% of the stakes on their own and do not rely on retail side's vote to determine the result.
Title: Re: SD - SandRidge Energy
Post by: lessthaniv on March 10, 2013, 09:56:42 AM
I'm not so sure that the stock price falls if TPG loses.

Like him or not there is no denying that Tom Ward has built a wonderful collection of assets in a short period of time. Many investors came to this company because of Tom Ward's track record and although I'm not a fan of corporate officers taking liberties ... everything that he's done has been disclosed. So investors have always had the opportunity to make there own decision. Contrary to the press, I think a strong contingent of shareholders are invested here because of and for - Tom Ward.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 10, 2013, 10:09:05 PM
I'm not so sure that the stock price falls if TPG loses.

Like him or not there is no denying that Tom Ward has built a wonderful collection of assets in a short period of time. Many investors came to this company because of Tom Ward's track record and although I'm not a fan of corporate officers taking liberties ... everything that he's done has been disclosed. So investors have always had the opportunity to make there own decision. Contrary to the press, I think a strong contingent of shareholders are invested here because of and for - Tom Ward.

I think the stock price does better...win or lose.  Markets don't like uncertainty. 

Regardless, I think like CHK, SD is going to have to change some of the behavior around the company.  I'm going to be first in line at the AGM to ask a question on this, so if I'm asking, how many other shareholders, be it Fairfax or Sandridge, are wondering the same thing?  TPG did illuminate a number of disturbing issues around compensation and conflict of interest.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: zippy1 on March 12, 2013, 05:59:59 AM
I managed the account of my father-in-law, who live in Taiwan. This morning I was told by him that he received calls about this proxy vote.  Wow! This fight must be fierce!
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on March 12, 2013, 06:55:34 AM
I have received no less than 15 messages at home AFTER telling them twice that I have received the information and will be voting.  SD campaign to get shareholders to vote is bordering on harassment.
Title: Re: SD - SandRidge Energy
Post by: abcd on March 12, 2013, 08:31:31 AM
Is it a generic reminder to vote or these calls are paid for by one party or other?
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 12, 2013, 09:13:32 AM
I have received no less than 15 messages at home AFTER telling them twice that I have received the information and will be voting.  SD campaign to get shareholders to vote is bordering on harassment.

Who is calling you? TPG or TW?
Now that TW's white revocation card is invalidated by the court, I think the only one who needs to call you should be TPG. Am I right?

On the other hand, is this an implication that TPG hasn't received enough votes yet, so it is getting desperate?
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on March 12, 2013, 09:35:03 AM
It is the company calling - not TPG. 
Title: Re: SD - SandRidge Energy
Post by: dowfin1 on March 12, 2013, 10:01:52 AM
In light of the Court’s ruling, on March 9, 2013, the Board approved of the director candidates proposed by the TPG-Axon group for the limited purpose of the change of control provisions of its Indentures. This approval operates to avert the potential consequences originally identified by the Board in connection with the Indentures. Further, under the terms of the Court’s ruling, the Board is no longer subject to the injunction described above. The Board continues to oppose the election of the director candidates proposed by the TPG-Axon group, believes their election is not in the best interest of the Company’s stockholders, and recommends that stockholders support the Company’s existing experienced board of directors.


http://www.sec.gov/Archives/edgar/data/1349436/000119312513102264/d499844d8k.htm
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 12, 2013, 02:37:59 PM
It is the company calling - not TPG.

That is weird.... What are they calling you about? Not to vote for TPG?
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on March 12, 2013, 02:51:36 PM
To remind me of the vote and to ensure that I know about the white card.
Title: Re: SD - SandRidge Energy
Post by: sampr01 on March 12, 2013, 03:14:17 PM
Anyone surprised that "TPG still having press releases and asking to VOTE for GREEN card" and voting closes in 2 days. Tom and board are not giving up. This may indicate that Tom may prevail, but TPG is still buying shares. confusing...
It is the company calling - not TPG.

That is weird.... What are they calling you about? Not to vote for TPG?
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 12, 2013, 03:23:02 PM
Anyone surprised that "TPG still having press releases and asking to VOTE for GREEN card" and voting closes in 2 days. Tom and board are not giving up. This may indicate that Tom may prevail, but TPG is still buying shares. confusing...
It is the company calling - not TPG.

That is weird.... What are they calling you about? Not to vote for TPG?

No.  $1,500 press release or tens of millions at risk in a proxy battle...the cost of the press release isn't much in relative terms. 

I think it will be close, but I suspect Tom and the board are out.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: sampr01 on March 12, 2013, 03:31:58 PM
Thanks Sanjeev

Any info on how FFH voted?. If Tom has any doubts...then he should have compromised and given up couple board seats?.

Am I thinking backwards?.

Anyone surprised that "TPG still having press releases and asking to VOTE for GREEN card" and voting closes in 2 days. Tom and board are not giving up. This may indicate that Tom may prevail, but TPG is still buying shares. confusing...
It is the company calling - not TPG.

That is weird.... What are they calling you about? Not to vote for TPG?

No.  $1,500 press release or tens of millions at risk in a proxy battle...the cost of the press release isn't much in relative terms. 

I think it will be close, but I suspect Tom and the board are out.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 12, 2013, 03:42:18 PM
To remind me of the vote and to ensure that I know about the white card.

That is confusing. The white card is already invalidated by the judge, so why do they still bother wasting time calling people about the white card?
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 12, 2013, 04:08:11 PM
Thanks Sanjeev

Any info on how FFH voted?. If Tom has any doubts...then he should have compromised and given up couple board seats?.

Am I thinking backwards?.

Anyone surprised that "TPG still having press releases and asking to VOTE for GREEN card" and voting closes in 2 days. Tom and board are not giving up. This may indicate that Tom may prevail, but TPG is still buying shares. confusing...
It is the company calling - not TPG.

That is weird.... What are they calling you about? Not to vote for TPG?

No.  $1,500 press release or tens of millions at risk in a proxy battle...the cost of the press release isn't much in relative terms. 

I think it will be close, but I suspect Tom and the board are out.  Cheers!

FFH said in multiple occasions to support TW. If they vote for TPG, won't they be sued for market manipulation?
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 12, 2013, 04:41:27 PM
Thanks Sanjeev

Any info on how FFH voted?. If Tom has any doubts...then he should have compromised and given up couple board seats?.

Am I thinking backwards?.

Anyone surprised that "TPG still having press releases and asking to VOTE for GREEN card" and voting closes in 2 days. Tom and board are not giving up. This may indicate that Tom may prevail, but TPG is still buying shares. confusing...
It is the company calling - not TPG.

That is weird.... What are they calling you about? Not to vote for TPG?

No.  $1,500 press release or tens of millions at risk in a proxy battle...the cost of the press release isn't much in relative terms. 

I think it will be close, but I suspect Tom and the board are out.  Cheers!

Fairfax has stated publically they support the existing management, so I would expect them to vote for management.  I just think alot of other shareholders are voting against the board based on the sentiment from our own poll that we conducted here, and the generaly case that TPG has laid out.  How can anyone in their right mind not see some conflict of interest even in the most optimistic of scenarios.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Cardboard on March 12, 2013, 06:27:17 PM
Have you guys looked into how much it is going to cost to oust Ward?

I get $97 million including all restricted stock. Not only is this guy having major conflicts of interest, total compensation is completely out of line at $20 million a year.

Same school as McClendon. He was COO at Chesapeake and co-founder after all. They also both seem to like the NBA Thunder and Sandridge pays to sponsor them.

You don't even need to look at TPG-Axon's allegations to figure out that Ward wasn't in there to reward himself in concert with shareholders, but himself first.

If Watsa keeps inviting that guy to his shareholders meeting (assuming he wins) or even letting him in, then I think that you guys should revolt. He talks about no ego at Fairfax in his annual letter, then what is this guy doing there or being associated so closely to the organization? Why does he plan on voting for him? Even Mason Hawkins who is normally not what I would call an activist could figure out that McClendon was abusing him and threw him out.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: matts on March 13, 2013, 07:42:46 AM
I agree with Cardboard. Ward's treatment of shareholders has been terrible. Fairfax is losing credibility by supporting this clown. And I don't care that they previously stated in the past that they support management. You issue a press release saying "in light of new information, we change our mind." That's not the least bit market manipulation. Fairfax claims integrity, but there is no integrity in stubborn, misplaced loyalty. Watsa should do the right thing for HIS shareholders and change Fairfax's stance on Ward (only recently went long SD, so this isn't sour grapes about a loss).
Title: Re: SD - SandRidge Energy
Post by: FFHWatcher on March 13, 2013, 07:58:48 AM
I agree with Cardboard. Ward's treatment of shareholders has been terrible. Fairfax is losing credibility by supporting this clown. And I don't care that the previously stated in the past that they support management. You issue a press release saying "in light on new information, we change our mind." That's not the least bit market manipulation. Fairfax claims integrity, but there is no integrity in stubborn, misplaced loyalty. Watsa should do the right thing for HIS shareholders and change Fairfax's stance on Ward (only recently went long SD, so this isn't sour grapes about a loss).

+1
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 13, 2013, 09:13:20 AM
When will the solicitation result come out? Right on March 16th, or some more time will be needed to count the votes?
Title: Re: SD - SandRidge Energy
Post by: lessthaniv on March 13, 2013, 09:29:43 AM
I agree with Cardboard. Ward's treatment of shareholders has been terrible. Fairfax is losing credibility by supporting this clown. And I don't care that they previously stated in the past that they support management. You issue a press release saying "in light of new information, we change our mind." That's not the least bit market manipulation. Fairfax claims integrity, but there is no integrity in stubborn, misplaced loyalty. Watsa should do the right thing for HIS shareholders and change Fairfax's stance on Ward (only recently went long SD, so this isn't sour grapes about a loss).

-1

Prem's loyalty is to his own shareholder's and that has been unwavering. By my math, his shareholders are in position to do well by Prem's decision to make an investment in SD and Tom Ward (all things considered).

Title: Re: SD - SandRidge Energy
Post by: T-bone1 on March 13, 2013, 10:19:39 AM
-1

Prem's loyalty is to his own shareholder's and that has been unwavering. By my math, his shareholders are in position to do well by Prem's decision to make an investment in SD and Tom Ward (all things considered).

I wholeheartedly agree with lessthaniv.

Because Prem and Buffett have such great reputations for honesty and fair dealing, people often expect them to act as some sort of policeman in the markets.  This just isn't a reasonable expectation.

Buffett said glowing things about John Geutfriend and I believe he was reluctant to let him go.  There have been many other examples in the past of Buffet investing in - and speaking highly of - executives who were overpaid and may have turned out to be unethical.

I think that Prem and Buffett both have a relatively low bar for offering public praise and a high one for offering public scorn - and this is the way it should be. 

Prem (or perhaps Sam Mitchell in this case) invested in Sandridge because he thought it would make money for all of the shareholders of Fairfax.  Whatever issues have been dug up at Fairfax, there are plenty of people doing something about it.  It would be a disservice to Fairfax's shareholders (by possibly hurting their future prospects for friendly co-investments) if Prem were to pile on at this point.

Tom Ward doesn't work for Fairfax - it isn't Prem's place to fire him.  If all of the negative information about Tom were brought to Fairfax instead of raised by activists and released in the press, then the onus would be on Fairfax as a fiduciary to do something about it.  Because it is being more than adequately raised by others, I don't think Fairfax needs to be participating in this fight in a public fashion.
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 13, 2013, 11:43:38 AM
-1

Prem's loyalty is to his own shareholder's and that has been unwavering. By my math, his shareholders are in position to do well by Prem's decision to make an investment in SD and Tom Ward (all things considered).

I wholeheartedly agree with lessthaniv.

Because Prem and Buffett have such great reputations for honesty and fair dealing, people often expect them to act as some sort of policeman in the markets.  This just isn't a reasonable expectation.

Buffett said glowing things about John Geutfriend and I believe he was reluctant to let him go.  There have been many other examples in the past of Buffet investing in - and speaking highly of - executives who were overpaid and may have turned out to be unethical.

I think that Prem and Buffett both have a relatively low bar for offering public praise and a high one for offering public scorn - and this is the way it should be. 

Prem (or perhaps Sam Mitchell in this case) invested in Sandridge because he thought it would make money for all of the shareholders of Fairfax.  Whatever issues have been dug up at Fairfax, there are plenty of people doing something about it.  It would be a disservice to Fairfax's shareholders (by possibly hurting their future prospects for friendly co-investments) if Prem were to pile on at this point.

Tom Ward doesn't work for Fairfax - it isn't Prem's place to fire him.  If all of the negative information about Tom were brought to Fairfax instead of raised by activists and released in the press, then the onus would be on Fairfax as a fiduciary to do something about it.  Because it is being more than adequately raised by others, I don't think Fairfax needs to be participating in this fight in a public fashion.

TW doesn't work for FFH? FFH is a 13% shareholder of SD. TW is supposed to work for all shareholders. So you can't say TW doesn't work for FFH.
Faced with the vote, FFH can either vote yes, or vote no, or ignore it, which means vote no also. If no one has called for the vote, and FFH does nothing, that is easier to explain. You can argue that Prem is a nice guy, and it is unfair for him to be the policeman.
But now that the vote is in front of Prem, and he is forced to choose either yes or no immediately, and he chooses no, can you still say that he is protecting FFH shareholders' interest? What is even more perplex is why he kept buying SD after he said he would support TW.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 11:54:03 AM
Have you guys looked into how much it is going to cost to oust Ward?

I get $97 million including all restricted stock. Not only is this guy having major conflicts of interest, total compensation is completely out of line at $20 million a year.

Same school as McClendon. He was COO at Chesapeake and co-founder after all. They also both seem to like the NBA Thunder and Sandridge pays to sponsor them.

You don't even need to look at TPG-Axon's allegations to figure out that Ward wasn't in there to reward himself in concert with shareholders, but himself first.

If Watsa keeps inviting that guy to his shareholders meeting (assuming he wins) or even letting him in, then I think that you guys should revolt. He talks about no ego at Fairfax in his annual letter, then what is this guy doing there or being associated so closely to the organization? Why does he plan on voting for him? Even Mason Hawkins who is normally not what I would call an activist could figure out that McClendon was abusing him and threw him out.

Cardboard

Hi Cardboard,

You should probably consider the saying "Better the devil you know, than the devil you don't know." 

Fairfax was into SD big...they probably think Tom Ward can increase shareholder value.  Doesn't mean they agree with the compensation or other conflicts of interest. 

Maybe they don't think firing Ward at over a hundred million, and then bringing in an unknown in the oil industry with TPG is the way to improve things.  They may pull a SEAM & Lou Simpson like at CHK, and create change internally without a complete change in the board and management.

Prem's never gone into a business with the intent of replacing management.  He looks to lead, improve their behavior, not displace them.  Only if it is completely untenable and change cannot occur is when he would push forward with anything else.  You should probably hear him out before deciding on why he has his stance. 

I don't like the compensation, excesses, and conflicts of interest...it's almost farcical the sheer gaudiness of it all.  Change is needed, but whether that comes from inside or outside is a personal choice for shareholders.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: matts on March 13, 2013, 12:00:20 PM
I don't agree with your statement. Yes, in the past, Prem's decision to invest with Ward may have been profitable. But it's also Prem's job to reevaluate the investments on a continual basis. Maybe Ward was the right guy to gather the assets, but maybe he is not the right guy to develop them. And isn't SD down huge since the IPO? so I'm not sure how your math is working out. Besides, we should all be considering our investments from today's viewpoint, and not putting so much emphasis on past performance. Otherwise, everyone would be riding the likes of Bear Stearns all the way to zero because of years of profitability. Situations change, so do investment characteristics. Investors need to adapt. My personal opinion is that Fairfax needs to adapt away from Ward to maximize its return on SD.

[/quote]

-1

Prem's loyalty is to his own shareholder's and that has been unwavering. By my math, his shareholders are in position to do well by Prem's decision to make an investment in SD and Tom Ward (all things considered).
[/quote]
Title: Re: SD - SandRidge Energy
Post by: sampr01 on March 13, 2013, 01:02:00 PM
Sanjeev

Congrats..

http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43

Then

http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html
Title: Re: SD - SandRidge Energy
Post by: Matson125 on March 13, 2013, 01:13:53 PM
Here it is!
http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html
Title: Re: SD - SandRidge Energy
Post by: bablu on March 13, 2013, 01:16:49 PM
This is terrific news.. Hats off to TPG to pull this one.. These guys are real..  :) :)
Title: Re: SD - SandRidge Energy
Post by: Grenville on March 13, 2013, 01:19:03 PM
I'm enjoying the discussion re: SD. Thank you all for sharing your opinions.

I'm happy to see a resolution to the proxy fight. I wonder how much Fairfax helped move the fight to the negotiating table.
Title: Re: SD - SandRidge Energy
Post by: longlake95 on March 13, 2013, 01:26:31 PM
I thought it would trade way up, in after hours trading?

Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 01:35:08 PM
Sanjeev

Congrats..

http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43

Then

http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html

Thanks!  It's right up there as one of our largest holdings.  I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now.  And at least they won't be blowing through $1.2B in capital expenditures next year.  I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him.  Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 13, 2013, 01:55:10 PM
Sanjeev

Congrats..

http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43

Then

http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html

Thanks!  It's right up there as one of our largest holdings.  I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now.  And at least they won't be blowing through $1.2B in capital expenditures next year.  I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him.  Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion.  Cheers!

Prasad, would you mind disclosing how much of your total portfolio is in SD? I have around 10%.
I think the current outcome is the best. SD does need transition periods to make it operate in a better way. I think TPG is probably giving up the rights to sue TW for his related party transactions in order to get this settlement outcome.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 13, 2013, 04:44:33 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

Title: Re: SD - SandRidge Energy
Post by: rogermunibond on March 13, 2013, 04:53:05 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

And Tom Ward has created more uncertainty with his lack of strategy for longer and he owns less than TPG.

 
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 13, 2013, 04:59:45 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

And Tom Ward has created more uncertainty with his lack of strategy for longer and he owns less than TPG.

how much % of TW's networth is tied to SD? How about TPG?
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 13, 2013, 05:28:14 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

LOL
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 05:32:18 PM
Sanjeev

Congrats..

http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43

Then

http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html

Thanks!  It's right up there as one of our largest holdings.  I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now.  And at least they won't be blowing through $1.2B in capital expenditures next year.  I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him.  Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion.  Cheers!

Prasad, would you mind disclosing how much of your total portfolio is in SD? I have around 10%.
I think the current outcome is the best. SD does need transition periods to make it operate in a better way. I think TPG is probably giving up the rights to sue TW for his related party transactions in order to get this settlement outcome.

Almost 12%.  I like the outcome too.  The new board can implement some controls and conduct due diligence, while Tom remains at the company.  You know that SD is now not going to be able to blow through all of that $2.6B in cash they received for the Permian assets, and anything that happens going forward will increase shareholder value...be it development of remaining properties and assets, sale of properties and assets, and there will be strict expenditure controls...bye, bye private jets!  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 05:39:48 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers! 
Title: Re: SD - SandRidge Energy
Post by: lessthaniv on March 13, 2013, 06:01:42 PM
I like the arrangement.
Tom has new parents.
Title: Re: SD - SandRidge Energy
Post by: Kiltacular on March 13, 2013, 06:39:59 PM
Quote
I like the arrangement.
Tom has new parents.

Where was TPG when I was a kid !?!?






Just kidding Mom and Dad
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 13, 2013, 06:46:05 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 13, 2013, 07:07:49 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.

Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 13, 2013, 07:37:20 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.

how about Tom get booted and replaced with a credible CEO right away
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 07:58:32 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.

Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much.

It will take a bit of time.  As the board goes to work, clarity will appear in their plans and Tom's fate will be decided.  After that, at least these guys will be working hard to make sure the company's value increases and they'll be accountable on operating costs.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 13, 2013, 07:58:41 PM
Good news for the company doesnt always equate with good news for the stock. I am happy with the outcome, but unhappy with the stock price.
My guess is TPG was close and didnt want to risk losing. I also sort of think or perhaps hope is a better word, Ward is close to selling the company and getting his parachute.

He needs a few more months to formalize things, and TPG agreed because the new buyers would pay Ward the $90 million and TPG could cash out, TPG also got reimbursed for the proxy battle making it a win for them there as well. If Ward cant find a suitable buyer, or butts head with the new board members he can be fired with cause pending the outcome of the investigation.

FFH, Cooperman, and everyone else can also save face, but get change. Everyone comes out on top, except for June option holders (I have a small June position). I think we will have a decent conclusion by YE. Unlike CHK most majors or super Independents can gobble up SD fairly easily. Especially if the Gulf is sold and debt is paid down.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 08:04:07 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.

how about Tom get booted and replaced with a credible CEO right away

Tom has value as CEO.  The sale of the Permian assets show that by itself.  But sometimes executives need to be accountable to someone other than themselves and a co-opted board.  Just take a look at a well-known burger restaurant CEO we all know and love!  No doubt that burger CEO is talented, but he does not know what restraint is and a CEO's ethics can be blurred by the shadow their ego casts.  Presently, there is a CEO and he reports to the board.  If the board feels they need to change that CEO, they will find someone suitable.  But thank God there is finally some strict oversight!  Cheers!
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 13, 2013, 08:04:29 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.

Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much.

It's okay. The next 3 months is going to be a mess in SD, we are going to have four BODs investigate the CEO, no COO. CEO knows that he will likely to be kicked soon. My bet is this will play out the same as CHK, only more nasty, Tom will resign without full 100million package and BODs will found no wrong doing.

Let's see if TPG can get rid of the GOM assets and monetize the infrastructure at a good price, simplify the capital structure and lower their cost by year end.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 08:07:31 PM
Good news for the company doesnt always equate with good news for the stock. I am happy with the outcome, but unhappy with the stock price.
My guess is TPG was close and didnt want to risk losing. I also sort of think or perhaps hope is a better word, Ward is close to selling the company and getting his parachute.

He needs a few more months to formalize things, and TPG agreed because the new buyers would pay Ward the $90 million and TPG could cash out, TPG also got reimbursed for the proxy battle making it a win for them there as well. If Ward cant find a suitable buyer, or butts head with the new board members he can be fired with cause pending the outcome of the investigation.

FFH, Cooperman, and everyone else can also save face, but get change. Everyone comes out on top, except for June option holders (I have a small June position). I think we will have a decent conclusion by YE. Unlike CHK most majors or super Independents can gobble up SD fairly easily. Especially if the Gulf is sold and debt is paid down.

You might be right Myth.  I think TPG's plan is most likely to sell the assets for a premium.  If they can't because of market forces, they will continue to operate the business.  And yes, you are correct.  SD's size means it is far more likely to be taken out.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 08:10:23 PM
I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June.

The only uncertainty is around Tom Ward...not the direction of the company.  Everything, whether Tom stays or not, is going to run through the board now...just like CHK.  And what was the alternative:

- I did not want to see Tom spend over $1.2B in capital expenditures in 2013!
- I don't want SD to have over 120% debt to equity again!
- I don't want multiple private jets at Sandridge.
- I don't want SD buying properties from Tom's children's trusts.
- I don't want Tom reaping huge rewards in royalty trusts from properties the company owns.
- I don't want SD buying a box at the Oklahoma Thunder.
- I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google!

I want accountability to shareholders from management and the board.  I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital.  I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest.  Cheers!

The only things better then the current outcome would be a $10 sale or Parsad as Chairman.
I agree with just about everything you wrote.

Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much.

It's okay. The next 3 months is going to be a mess in SD, we are going to have four BODs investigate the CEO, no COO. CEO knows that he will likely to be kicked soon. My bet is this will play out the same as CHK, only more nasty, Tom will resign without full 100million package and BODs will found no wrong doing.

Let's see if TPG can get rid of the GOM assets and monetize the infrastructure at a good price, simplify the capital structure and lower their cost by year end.

I suspect the board will be looking for buyers concurrent to their investigation...thus no COO...why pay him?  TPG doesn't plan on blowing all the cash exploring the properties.  The company will probably be sold, or an offer will be tendered, before the investigation is completed.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 13, 2013, 08:45:52 PM
The COO should go. After the IRR reductions, I dont see much value in that role or the $7 million it cost. Why do we even need a COO? I also think some high paying executive had to be thrown overboard. I was hoping for Ward and Grubb, but will settle for just Grubb.

The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying.

I really like this agreement, as I said win win for all, and there is a plan behind the madness. The only that makes sense is a pending sale where everyone can save face. CHK has partially screwed that up with their distressed sale.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 13, 2013, 09:00:21 PM
If there is a buyout, what is the possible price ?
I would say $8-$9

The COO should go. After the IRR reductions, I dont see much value in that role or the $7 million it cost. Why do we even need a COO? I also think some high paying executive had to be thrown overboard. I was hoping for Ward and Grubb, but will settle for just Grubb.

The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying.

I really like this agreement, as I said win win for all, and there is a plan behind the madness. The only that makes sense is a pending sale where everyone can save face. CHK has partially screwed that up with their distressed sale.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 13, 2013, 09:11:22 PM
The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying.

You are totally correct.  I've been following SD for a couple of years now, ever since Tom started coming to our dinners with Prem.  But I have never felt comfortable with the balance sheet.  It wasn't until the Permian asset sale, where they had $2.6B coming in to pay off the debt maturing in the next couple of years, that I finally decided to take a serious look.  Once TPG started getting serious with the proxy fight, and the stock was tanking, I decided to buy.  I didn't want Tom blowing that money on $1.2B plus in capital expenditures for 2013.  I saw their latest presentation, and I'm thinking, why the hell would you spend more than you can afford in capex?  And there was talk of even going into the line of credit if necessary...WTF!

If there is a buyout, what is the possible price ?
I would say $8-$9


I think they could get $9-10 with the right buyer who wants those assets.  With TPG in charge, lots of cash on the books, and total accountability on spending, they can wait for the right buyer.  Cheers!

 
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 14, 2013, 07:08:27 AM
hope the market will like that deal as much as you guys do.
Title: Re: SD - SandRidge Energy
Post by: Cardboard on March 14, 2013, 07:38:06 AM
I think that the market reaction had to be expected or more or less muted. TPG-Axon winning seats or their vote was not adding any value immediately and it was the likely outcome. If Ward had kept full control, then IMO the reaction would have been quite negative. The case for a "pop" was an immediate sale of the company at some premium which IMO is currently unlikely.

The oil production content has dropped from 54 to 44% following the Permian sale. So, I think that they have no choice, but to continue developing the Mississippian formation to increase production (cash flow), oil content and reserves. Moreover, if you do a quick extrapolation from the Permian sale to all other assets of the company based on current reserves and production minus debt, you get about current stock price. And that is assuming reasonable selling prices.

The latest sale from Chesapeake indicates that we are no longer in a sellers market. I understand that they were forced sellers, but when you consider that it took a Chinese buyer on U.S. soil to acquire assets at distressed prices then it should give you a pause. Just selling the company or assets as TPG and Mount Kellett mentioned is not a viable or way to obtain good returns at the moment.

So how the Mississippian is developed is another question and this latest development will drive better capital allocation and restraint on folly. One has to scratch their head as to why they spent $1.2 billion to acquire Dynamic in the Gulf with a reserve life of only 5.0 years, to only realize months later that they have to spend a massive amount to develop their best asset in the Mississippian. So now, the Gulf asset is there only to generate free cash flow to develop the Mississippian with just a 5 year life or in need of exploration and development! 

Another hope is this mysterious joint venture disclosed in the latest presentation that they have considered to develop the Kansas part of the Mississippian. They must have had discussions with some partners, so this could alleviate the need to spend their own cash and to do it all on their own. It could also end up being now a bigger deal than what was considered by Ward and team.

My main fear with this investment currently is the price of oil since it will take a little while in my view to get this value to surface.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 14, 2013, 08:09:14 AM
Agree that their current reserve and production is not worth much more than the current market cap,
and SD 's value is really in the undeveloped reserve. However, to unlock these reserve you need to drill drill drill to at least show the potential - it requires huge capital expenditure - a dilemma at least

Well, if Ward had kept control the share would crash; and if Ward lost control, the share dropped so who were supporting the share price before today -  quite a puzzle for me :)


I think that the market reaction had to be expected or more or less muted. TPG-Axon winning seats or their vote was not adding any value immediately and it was the likely outcome. If Ward had kept full control, then IMO the reaction would have been quite negative. The case for a "pop" was an immediate sale of the company at some premium which IMO is currently unlikely.

The oil production content has dropped from 54 to 44% following the Permian sale. So, I think that they have no choice, but to continue developing the Mississippian formation to increase production (cash flow), oil content and reserves. Moreover, if you do a quick extrapolation from the Permian sale to all other assets of the company based on current reserves and production minus debt, you get about current stock price. And that is assuming reasonable selling prices.

The latest sale from Chesapeake indicates that we are no longer in a sellers market. I understand that they were forced sellers, but when you consider that it took a Chinese buyer on U.S. soil to acquire assets at distressed prices then it should give you a pause. Just selling the company or assets as TPG and Mount Kellett mentioned is not a viable or way to obtain good returns at the moment.

So how the Mississippian is developed is another question and this latest development will drive better capital allocation and restraint on folly. One has to scratch their head as to why they spent $1.2 billion to acquire Dynamic in the Gulf with a reserve life of only 5.0 years, to only realize months later that they have to spend a massive amount to develop their best asset in the Mississippian. So now, the Gulf asset is there only to generate free cash flow to develop the Mississippian with just a 5 year life or in need of exploration and development! 

Another hope is this mysterious joint venture disclosed in the latest presentation that they have considered to develop the Kansas part of the Mississippian. They must have had discussions with some partners, so this could alleviate the need to spend their own cash and to do it all on their own. It could also end up being now a bigger deal than what was considered by Ward and team.

My main fear with this investment currently is the price of oil since it will take a little while in my view to get this value to surface.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 14, 2013, 08:35:41 AM
I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news.

I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder.

Title: Re: SD - SandRidge Energy
Post by: FFHfan on March 14, 2013, 09:20:28 AM
SandRidge Energy outlook just got murkier: analysts


http://blogs.marketwatch.com/energy-ticker/2013/03/14/sandridge-energy-outlook-just-got-murkier-analysts/


Prem Watsa Hedge fund manager?  ;D

Quote
Hedge fund manager Prem Watsa, sometimes known as the Canadian Warren Buffett, apparently believes SandRidge will see better times ahead. In the fourth quarter, he bought some 28.1 million shares, which made SandRidge 8.5% of his portfolio, according to datarama.

http://finance.yahoo.com/news/canadian-warren-buffett-buys-sandridge-162011432.html
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 14, 2013, 09:52:35 AM
SandRidge Energy outlook just got murkier: analysts


http://blogs.marketwatch.com/energy-ticker/2013/03/14/sandridge-energy-outlook-just-got-murkier-analysts/


Prem Watsa Hedge fund manager?  ;D

Quote
Hedge fund manager Prem Watsa, sometimes known as the Canadian Warren Buffett, apparently believes SandRidge will see better times ahead. In the fourth quarter, he bought some 28.1 million shares, which made SandRidge 8.5% of his portfolio, according to datarama.

http://finance.yahoo.com/news/canadian-warren-buffett-buys-sandridge-162011432.html

These media folks are our friends. Because of their idiotic reports, we get better opportunities to buy low and sell high. :)
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 14, 2013, 10:43:37 AM
I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news.

I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder.

I agree.  I think it is probably pro-management selling.  I also agree that Sinopec would be interested...among others.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 14, 2013, 11:38:44 AM
Quite curious who are these pro-TW ppl :) :0

I doube Fairfax is selling today - quite unlikely - they are smart ppl anyway...

I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news.

I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder.

I agree.  I think it is probably pro-management selling.  I also agree that Sinopec would be interested...among others.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 14, 2013, 11:49:22 AM
Quite curious who are these pro-TW ppl :) :0

I doube Fairfax is selling today - quite unlikely - they are smart ppl anyway...

I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news.

I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder.

I agree.  I think it is probably pro-management selling.  I also agree that Sinopec would be interested...among others.  Cheers!

Very unlikely Fairfax is selling.  They may have supported Tom Ward, but they made the investment because they thought the assets were undervalued.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 14, 2013, 11:58:10 AM
What's FFH's cost basis on the common? I think above 6?
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 14, 2013, 07:47:23 PM
In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1

Title: Re: SD - SandRidge Energy
Post by: Parsad on March 14, 2013, 10:44:22 PM
In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1

I think that's mentioned in one of the posts earlier, but assumes that all of the proven reserves are developed and cash flows discounted back to the present.  It may or may not be accurate, as it has not happened, and historically these things are a crapshoot because anything could happen in between, and you still have to fund all of the capex to develop the land.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 15, 2013, 08:08:50 AM
In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1

I think that's mentioned in one of the posts earlier, but assumes that all of the proven reserves are developed and cash flows discounted back to the present.  It may or may not be accurate, as it has not happened, and historically these things are a crapshoot because anything could happen in between, and you still have to fund all of the capex to develop the land.  Cheers!

I asked that question earlier but no body answered. I am still trying to figure out:
1. What is the oil and gas price assumed for this net asset value.
2. Is the future cash flow discounted by 10% or other ratios.
3. Is the net asset value the future discounted cash flow minus expected capex?

I think if the management just put out that net asset value of $31 without detailed explanation, and given the promotional nature of TW, that figure is likely way off.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 15, 2013, 08:34:20 AM
never took it seriously :)
but I am curious if it only counted the discounted value of all proved reserve if developed,
or it also considered unproved reserve in some sense.
As I remember the proved reserve (even  if developed) is not worth that much (actually far from)



In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1

I think that's mentioned in one of the posts earlier, but assumes that all of the proven reserves are developed and cash flows discounted back to the present.  It may or may not be accurate, as it has not happened, and historically these things are a crapshoot because anything could happen in between, and you still have to fund all of the capex to develop the land.  Cheers!

I asked that question earlier but no body answered. I am still trying to figure out:
1. What is the oil and gas price assumed for this net asset value.
2. Is the future cash flow discounted by 10% or other ratios.
3. Is the net asset value the future discounted cash flow minus expected capex?

I think if the management just put out that net asset value of $31 without detailed explanation, and given the promotional nature of TW, that figure is likely way off.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 15, 2013, 01:08:28 PM
Very good and fair article from Seekingalpha on SD.  Cheers!

http://seekingalpha.com/article/1276211-sandridge-energy-activists-win-why-is-the-stock-down?source=yahoo
Title: Re: SD - SandRidge Energy
Post by: FFHfan on March 15, 2013, 03:18:36 PM
Departing SandRidge COO gets $9 million payout, basketball tickets.

http://finance.yahoo.com/news/departing-sandridge-coo-gets-9-213204066.html (http://finance.yahoo.com/news/departing-sandridge-coo-gets-9-213204066.html)
Title: Re: SD - SandRidge Energy
Post by: LC on March 19, 2013, 09:24:32 AM
http://www.insidermonkey.com/blog/what-ceo%E2%80%99s-probable-removal-means-for-sandridge-energy-inc-sd-89817/

TPG wins board...
Quote
Four directors nominated by TPG-Axon will immediately be added to SandRidge’s Board, which will hire an independent firm to review land deals by Ward and his family
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on March 19, 2013, 09:42:22 AM
Departing SandRidge COO gets $9 million payout, basketball tickets.

http://finance.yahoo.com/news/departing-sandridge-coo-gets-9-213204066.html (http://finance.yahoo.com/news/departing-sandridge-coo-gets-9-213204066.html)


go thunders!
Title: Re: SD - SandRidge Energy
Post by: abcd on March 19, 2013, 03:35:25 PM
I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news.

I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder.

I agree.  I think it is probably pro-management selling.  I also agree that Sinopec would be interested...among others.  Cheers!

That seems to be the case. It is TW himself.

http://www.sec.gov/cgi-bin/own-disp?action=getowner&CIK=0001038276
Title: Re: SD - SandRidge Energy
Post by: compoundinglife on March 19, 2013, 04:18:19 PM
Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 19, 2013, 04:33:24 PM
Wonder why insiders are selling (even if they will leave)...
They don't see a value even at this price ?

Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was.
Title: Re: SD - SandRidge Energy
Post by: Parsad on March 19, 2013, 04:52:26 PM
Wonder why insiders are selling (even if they will leave)...
They don't see a value even at this price ?

Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was.

Because he's going to plow his money into something he owns and controls directly.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 19, 2013, 05:03:02 PM
Wonder why insiders are selling (even if they will leave)...
They don't see a value even at this price ?

Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was.

Because he's going to plow his money into something he owns and controls directly.  Cheers!

TW has tons to sell if it want out completely. Holding my underwater shares.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 19, 2013, 05:07:42 PM
I like this -

a "forced" seller in some sense, although I am not 100% sure why TW has to sell.
This is getting interesting... thinking about adding more

Wonder why insiders are selling (even if they will leave)...
They don't see a value even at this price ?

Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was.

Because he's going to plow his money into something he owns and controls directly.  Cheers!

TW has tons to sell if it want out completely. Holding my underwater shares.
Title: Re: SD - SandRidge Energy
Post by: Myth465 on March 19, 2013, 05:50:53 PM
Parsad has a point, I mean Tom controls an entity which has hundreds of thousands of acres in the same location, why would he hold is the question?
Title: Re: SD - SandRidge Energy
Post by: Cardboard on March 19, 2013, 06:06:26 PM
I read in the filings somewhere that the vast majority of his shares are pledged for loans.

Who did that too? I guess his good old buddy Aubrey McClendon.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 19, 2013, 06:25:05 PM
I think we can assume there will be no sale near term. If not, I don't see how TW would leave millions on the table by selling now. Wonder what will Fairfax do, they loaded up on 6+
Title: Re: SD - SandRidge Energy
Post by: valueorama on March 19, 2013, 07:21:28 PM
I see 2 possibilities:
  1. As he has pledged his shares for loans, he is de-leveraging. Will wait to see what TPG has up their sleeve.
or 2. He just wants out and going to liquidate and resign.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 19, 2013, 07:27:36 PM
don't think fairfax needs to do anything :)
their cost is very low, compared to most others

I think we can assume there will be no sale near term. If not, I don't see how TW would leave millions on the table by selling now. Wonder what will Fairfax do, they loaded up on 6+
Title: Re: SD - SandRidge Energy
Post by: cogitator99 on March 20, 2013, 12:46:47 AM
Does anyone have a detailed breakdown of the major shareholders?

See attached...

Thanks. Looks like Allan Mecham bought 1806134 shares in Q4 2012. ~$10 million…

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/the-400-man!/

Thanks a lot! Where did you get that data? From sec.gov, I searched for Arlington Value Management, and couldn't find anything like 13HR.
That sounds amazing given the fund only has 20 M under management currently.

Oh...... I just realized that the original post is pretty old. Do you know the current size of this fund?

Arlington currently had close to $190mn in AUM at end-2012. (Should be more now given BRK and BAC's strong YTD performance) SD is a 6% position for Mecham.

As for the comment about Mecham buying 1.8mn shares in 4Q12, that seems wrong. That's his entire position as far we know, and my understanding is that he's had this position for a while. 
Title: Re: SD - SandRidge Energy
Post by: cogitator99 on March 20, 2013, 01:12:25 AM
Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

Agree with Parsad here...you shouldn't be making decisions about FFH based on what you believe are the merits (or lack thereof) of the current investment exposures. It's just like when people were hating on FFH because of RIMM, not bothering to check what the impact the holding would have even in an adverse scenario.

I don't think anyone buys or sells BRK based on how KO, WFC, or IBM is doing on any given day...
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 21, 2013, 10:10:51 AM
Nat gas price is back up to $4 in March.... That is quite something. March is usually not too cold and not too hot so there is normally not much demand for either heating or cooling. I bet there is a lot of industrial demand.
It could also be that a lot of speculators were betting the gas price going down to $2 again like last year, and they were forced to close the short position.

How much would SD be worth if gas price goes back to $6?
Title: Re: SD - SandRidge Energy
Post by: oldye on March 21, 2013, 12:52:27 PM
Back of the envelope calculation:
In the analyst presentation for 2013, they were projecting 333 million in revenue from nat gas assuming $3.45
Assuming $4 average price, FFO should increase by about 15%.  At $6 average gas,  FFO should increase by about 70%. Not to mention make the overland thrust, which currently costing them money into a viable asset they could sell!  This isn't taking into account the effect of using enhanced oil recovery on 300+ new wells this year.  I wouldn't wait for $6 gas, I hope they full hedge their nat gas production at these prices because rig count has started to creep up this week.

Title: Re: SD - SandRidge Energy
Post by: alertmeipp on March 21, 2013, 02:04:27 PM
if NG trades near 5 end of this year, their NAV will look very good.
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 25, 2013, 09:41:00 AM
http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9182431-1480-19521&type=sect&TabIndex=2&companyid=696018&ppu=%252fdefault.aspx%253fsym%253dSD

Mount Kellett Capital Management LP bought more shares.
Title: Re: SD - SandRidge Energy
Post by: FFHfan on March 25, 2013, 08:13:49 PM
SandRidge CEO's $20.8 Million Sale

http://online.barrons.com/article/SB50001424052748704882404578382382610130270.html?mod=BOL_twm_da (http://online.barrons.com/article/SB50001424052748704882404578382382610130270.html?mod=BOL_twm_da)
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 26, 2013, 07:53:44 AM
Back of the envelope calculation:
In the analyst presentation for 2013, they were projecting 333 million in revenue from nat gas assuming $3.45
Assuming $4 average price, FFO should increase by about 15%.  At $6 average gas,  FFO should increase by about 70%. Not to mention make the overland thrust, which currently costing them money into a viable asset they could sell!  This isn't taking into account the effect of using enhanced oil recovery on 300+ new wells this year.  I wouldn't wait for $6 gas, I hope they full hedge their nat gas production at these prices because rig count has started to creep up this week.

Do you know any minimum drilling agreement on that Overland Thrust? I know for lease opeartions, if they don't drill like, a minimum of two wells per year, the land got seized.
But anyway, that could be treated like a nat gas call option. Free lottery to play.
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on March 26, 2013, 08:54:36 AM
On the West Texas Overthrust..  from the 2007 10-K

We have drilled and developed natural gas in the WTO since 1986. This area is located in Pecos and Terrell Counties in West Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. The WTO was created by the collision of the ancestral North American and South American continents resulting in source rock and reservoir rock, including potential hydrocarbon traps, becoming thrusted upon one another in multiple layers (imbricate stacking) along the leading edge of the WTO. The collision and thrusting resulted in the reservoir rock becoming highly fractured, increasing the likelihood of conventional natural gas and oil accumulations in the reservoir rock and creating a unique geological setting in North America.
 
The primary reservoir rocks in the WTO range in depth from 2,000 to 11,000 feet and range in geologic age from the Permian to the Devonian. The imbricate stacking of these conventional gas-prone reservoirs provides for multi-pay exploration and development opportunities. Despite this, the WTO has historically been largely under-explored due primarily to the remoteness and lack of infrastructure in the region, as well as historical limitations of conventional subsurface geological and geophysical methods. However, several fields including our prolific Piñon Field have been discovered. We believe our access to and control of the necessary infrastructure combined with application of modern seismic techniques will allow us to identify further exploration and development opportunities in the WTO.
 
In May 2007, we began a three-year, multi-phase seismic program to acquire 1,400 square miles of modern 3-D seismic data in the WTO. We believe this enhanced 3-D seismic program may identify structural details of potential reservoirs, thus lowering exploratory drilling risk and improving completion efficiency. The first two phases of the seismic program covered 389 square miles and were completed during 2007.
 
We have acquired leasehold acreage in the WTO, tripling our position since January 2006. As of December 31, 2007 we owned 600,546 gross (508,745 net) acres in the WTO, substantially all of which are along the leading edge of the WTO.

Now from the 2012 10-K...

West Texas Overthrust. The WTO is an area located in Pecos and Terrell Counties in west Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. Low natural gas prices continue to limit development activity in this area. The Company held interests in approximately 257,000 gross (215,000 net) leasehold acres in the WTO at December 31, 2012. The Company’s average daily net production in this area was approximately 7.9 MBoe for the month of December 2012.
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 26, 2013, 09:15:43 AM
On the West Texas Overthrust..  from the 2007 10-K

We have drilled and developed natural gas in the WTO since 1986. This area is located in Pecos and Terrell Counties in West Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. The WTO was created by the collision of the ancestral North American and South American continents resulting in source rock and reservoir rock, including potential hydrocarbon traps, becoming thrusted upon one another in multiple layers (imbricate stacking) along the leading edge of the WTO. The collision and thrusting resulted in the reservoir rock becoming highly fractured, increasing the likelihood of conventional natural gas and oil accumulations in the reservoir rock and creating a unique geological setting in North America.
 
The primary reservoir rocks in the WTO range in depth from 2,000 to 11,000 feet and range in geologic age from the Permian to the Devonian. The imbricate stacking of these conventional gas-prone reservoirs provides for multi-pay exploration and development opportunities. Despite this, the WTO has historically been largely under-explored due primarily to the remoteness and lack of infrastructure in the region, as well as historical limitations of conventional subsurface geological and geophysical methods. However, several fields including our prolific Piñon Field have been discovered. We believe our access to and control of the necessary infrastructure combined with application of modern seismic techniques will allow us to identify further exploration and development opportunities in the WTO.
 
In May 2007, we began a three-year, multi-phase seismic program to acquire 1,400 square miles of modern 3-D seismic data in the WTO. We believe this enhanced 3-D seismic program may identify structural details of potential reservoirs, thus lowering exploratory drilling risk and improving completion efficiency. The first two phases of the seismic program covered 389 square miles and were completed during 2007.
 
We have acquired leasehold acreage in the WTO, tripling our position since January 2006. As of December 31, 2007 we owned 600,546 gross (508,745 net) acres in the WTO, substantially all of which are along the leading edge of the WTO.

Now from the 2012 10-K...

West Texas Overthrust. The WTO is an area located in Pecos and Terrell Counties in west Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. Low natural gas prices continue to limit development activity in this area. The Company held interests in approximately 257,000 gross (215,000 net) leasehold acres in the WTO at December 31, 2012. The Company’s average daily net production in this area was approximately 7.9 MBoe for the month of December 2012.

Thank you!
215k net acres doesn't seem to be significant to pay attention to. The key of SD success is still how the Missisipian Lime plays out. With better nat gas prices recently, I think SD and CHK will both see some relief.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on March 26, 2013, 09:37:02 AM
Not sure if CHK will see big relief
They hedged at low NG price , LOL


On the West Texas Overthrust..  from the 2007 10-K

We have drilled and developed natural gas in the WTO since 1986. This area is located in Pecos and Terrell Counties in West Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. The WTO was created by the collision of the ancestral North American and South American continents resulting in source rock and reservoir rock, including potential hydrocarbon traps, becoming thrusted upon one another in multiple layers (imbricate stacking) along the leading edge of the WTO. The collision and thrusting resulted in the reservoir rock becoming highly fractured, increasing the likelihood of conventional natural gas and oil accumulations in the reservoir rock and creating a unique geological setting in North America.
 
The primary reservoir rocks in the WTO range in depth from 2,000 to 11,000 feet and range in geologic age from the Permian to the Devonian. The imbricate stacking of these conventional gas-prone reservoirs provides for multi-pay exploration and development opportunities. Despite this, the WTO has historically been largely under-explored due primarily to the remoteness and lack of infrastructure in the region, as well as historical limitations of conventional subsurface geological and geophysical methods. However, several fields including our prolific Piñon Field have been discovered. We believe our access to and control of the necessary infrastructure combined with application of modern seismic techniques will allow us to identify further exploration and development opportunities in the WTO.
 
In May 2007, we began a three-year, multi-phase seismic program to acquire 1,400 square miles of modern 3-D seismic data in the WTO. We believe this enhanced 3-D seismic program may identify structural details of potential reservoirs, thus lowering exploratory drilling risk and improving completion efficiency. The first two phases of the seismic program covered 389 square miles and were completed during 2007.
 
We have acquired leasehold acreage in the WTO, tripling our position since January 2006. As of December 31, 2007 we owned 600,546 gross (508,745 net) acres in the WTO, substantially all of which are along the leading edge of the WTO.

Now from the 2012 10-K...

West Texas Overthrust. The WTO is an area located in Pecos and Terrell Counties in west Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. Low natural gas prices continue to limit development activity in this area. The Company held interests in approximately 257,000 gross (215,000 net) leasehold acres in the WTO at December 31, 2012. The Company’s average daily net production in this area was approximately 7.9 MBoe for the month of December 2012.

Thank you!
215k net acres doesn't seem to be significant to pay attention to. The key of SD success is still how the Missisipian Lime plays out. With better nat gas prices recently, I think SD and CHK will both see some relief.
Title: Re: SD - SandRidge Energy
Post by: sampr01 on March 26, 2013, 10:45:15 AM
Not sure if CHK will see big relief
They hedged at low NG price , LOL

CHK hedged 50% NG at $3.62.
Title: Re: SD - SandRidge Energy
Post by: muscleman on March 26, 2013, 12:02:55 PM
Not sure if CHK will see big relief
They hedged at low NG price , LOL

CHK hedged 50% NG at $3.62.

Right. $3.62 is not too bad.
Title: Re: SD - SandRidge Energy
Post by: stahleyp on April 01, 2013, 10:22:03 AM
why were the pfds (SDRXP) trading at $4.375 today???  :o
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on April 01, 2013, 10:27:48 AM
why were the pfds (SDRXP) trading at $4.375 today???  :o

What?

I'm seeing quote at 94.375 from E-Trade.

day's range
94.375 - 94.375





is par $100?
Title: Re: SD - SandRidge Energy
Post by: stahleyp on April 01, 2013, 10:29:59 AM
why were the pfds (SDRXP) trading at $4.375 today???  :o

What?

I'm seeing quote at 94.375 from E-Trade.

day's range
94.375 - 94.375





is par $100?

Yeah, par is $100. They are trading there now but on the system I see there was a volume of 250 share sat the $4 range. I was shocked. I put an order it, but it didn't fill. haha
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on April 01, 2013, 10:41:46 AM
why were the pfds (SDRXP) trading at $4.375 today???  :o

What?

I'm seeing quote at 94.375 from E-Trade.

day's range
94.375 - 94.375





is par $100?

Yeah, par is $100. They are trading there now but on the system I see there was a volume of 250 share sat the $4 range. I was shocked. I put an order it, but it didn't fill. haha

I see. If it filled, it would have been a very nice monday morning!   :D
Title: Re: SD - SandRidge Energy
Post by: stahleyp on April 01, 2013, 10:49:39 AM
Oh yeah, probably the best Monday morning ever! haha. I wouldn't be surprised if the 250 lot ended up being busted though.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 02, 2013, 07:05:49 AM
this thing has been under pressure ever since TPG gets the board seat.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 02, 2013, 07:49:30 AM
TW still has near 20M shares SD to sell ?
That's a lot of selling pressure ahead ...
:)

this thing has been under pressure ever since TPG gets the board seat.
Title: Re: SD - SandRidge Energy
Post by: luck on April 02, 2013, 08:49:16 AM
yeah, i should have thought about that before i bought a little bit at 5.69.  c'est la vie.  if it gets to the 4's, i might buy more.  tom ward's definitely running for the hills with his stock it seems.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on April 02, 2013, 03:02:47 PM
Anyone adding during this price drop?
Title: Re: SD - SandRidge Energy
Post by: enoch01 on April 02, 2013, 03:21:34 PM
Anyone adding during this price drop?

Yes, today.
Title: Re: SD - SandRidge Energy
Post by: LC on April 02, 2013, 04:30:23 PM
Anyone adding during this price drop?
I sold a few $5 april puts...somewhat hoping I get put to. If not, I might pick up some shares regardless.
Title: Re: SD - SandRidge Energy
Post by: stahleyp on April 02, 2013, 06:30:51 PM
The 2015 puts with a strike of $5 are selling for $1.50 or so.
Title: Re: SD - SandRidge Energy
Post by: valueorama on April 02, 2013, 06:35:33 PM
The 2015 puts with a strike of $5 are selling for $1.50 or so.

I saw that and i am tempted.  But it could easily be a 2yr endeavour with no result and tie up your cash.
Title: Re: SD - SandRidge Energy
Post by: tombgrt on April 03, 2013, 09:37:51 AM
Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))


If anyone has an idea on the bold question, I would love to hear your opinion! TIA
Title: Re: SD - SandRidge Energy
Post by: Shane on April 03, 2013, 09:46:39 AM
3 months ago the price peaked at $7.24 and is now $4.88.  Was the market really putting a 34% premium on Ward's position as CEO even when it was in question?
Title: Re: SD - SandRidge Energy
Post by: luck on April 03, 2013, 09:54:19 AM
yeah, i agree dinakar singh seems like a smart guy in interviews, goldman's top trader for awhile.  his fund has done pretty well. 

i don't see any material change in the business since the activists have taken over.  there are definitely alternatives to ward as far as striking deals and so forth that are probably just as good and my guess is singh and company will figure out a solution. 

right now, executive selling, stop losses hit, the long proposition not being as clear cut as other stocks might take this to the three's at this rate.  i'm definitely a bit surprised by mr. market's price action after the activist's deal.
Title: Re: SD - SandRidge Energy
Post by: hellsten on April 03, 2013, 09:58:36 AM
Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))


If anyone has an idea on the bold question, I would love to hear your opinion! TIA

I'm afraid of what happens when (if?) Tom Ward and his cohorts leave. I guess the outcome won't be too bad with value investors behind the company. I just added to my position.

Here's food for thought:
http://www.wolframalpha.com/input/?i=natural+gas+vs+sd
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 03, 2013, 10:07:15 AM
Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))


If anyone has an idea on the bold question, I would love to hear your opinion! TIA

I'm afraid of what happens when (if?) Tom Ward and his cohorts leave. I guess the outcome won't be too bad with value investors behind the company. I just added to my position.

Here's food for thought:
http://www.wolframalpha.com/input/?i=natural+gas+vs+sd

Not a good comparison.  NGS spends only 68 cents of every operating dollar on capex.  SD in the last year spent three times operating cash on capex!  If SD capped capex at the same 68 cents per dollar as NGS, SD would have made almost 55 cents per share...a 9 times P/E.  I think you will see TPG and the board reduce capex enormously.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: hellsten on April 03, 2013, 10:26:54 AM
Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))


If anyone has an idea on the bold question, I would love to hear your opinion! TIA

I'm afraid of what happens when (if?) Tom Ward and his cohorts leave. I guess the outcome won't be too bad with value investors behind the company. I just added to my position.

Here's food for thought:
http://www.wolframalpha.com/input/?i=natural+gas+vs+sd

Not a good comparison.  NGS spends only 68 cents of every operating dollar on capex.  SD in the last year spent three times operating cash on capex!  If SD capped capex at the same 68 cents per dollar as NGS, SD would have made almost 55 cents per share...a 9 times P/E.  I think you will see TPG and the board reduce capex enormously.  Cheers!

Sorry, I thought I posted a graph comparing the price of natural gas to SD. This is the correct link:
http://www.wolframalpha.com/input/?i=natural+gas+price+vs+sd
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 03, 2013, 10:34:25 AM
Ah, ok that makes more sense!   ;D  Cheers!
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 03, 2013, 07:45:36 PM
http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1


At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

I am over 5% for sure.  8)

Btw, I added some today.
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 03, 2013, 09:37:30 PM
http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1


At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

I am over 5% for sure.  8)

Btw, I added some today.

We are WWAAAAYYYY over 5%!  Should I reallocate?   ;D  Cheers!
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 03, 2013, 10:11:55 PM
With an avg cost of $6
, I am very deeply under water :(
Under water is not sad; the sad thing is I used up my "quote" to buy SD

http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1


At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

I am over 5% for sure.  8)

Btw, I added some today.

We are WWAAAAYYYY over 5%!  Should I reallocate?   ;D  Cheers!
Title: Re: SD - SandRidge Energy
Post by: bmichaud on April 04, 2013, 08:11:58 AM
Couple of interesting sell side notes on SD's valuation.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 04, 2013, 09:08:12 AM
Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.
Title: Re: SD - SandRidge Energy
Post by: stahleyp on April 04, 2013, 09:52:11 AM
Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

I took a little bit further look at this guy (I didn't do a deep dive though) and found this article. Not quite a year old and 1 out of 7 is close to the target (COG) one is somewhat close (EOG) and well, most are off quite a bit.

http://www.forbes.com/sites/canaccordgenuity/2012/06/11/top-oil-picks-post-upside/

His top pick, COG, did do really well tough.

a few more:
http://www.forbes.com/sites/canaccordgenuity/
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 04, 2013, 10:27:11 AM
If I paid attention to analysts, I would never have invested in Berkshire (double in one year), Fairfax (triple in five years), Steak'n Shake (quadruple in two years), Bank of America (over double in two years) and now Sandridge.  My best investments have come from ignoring what anyone else has to say about something.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: value-is-what-you-get on April 04, 2013, 11:15:51 AM
I had to chuckle at the spreadsheets with revenue projections out in 2016.  Beware of geeks analysts bearing spreadsheets!

I'll take the 50 cent dollar today thanks, they can keep the spreadsheets!

Title: Re: SD - SandRidge Energy
Post by: BargainValueHunter on April 04, 2013, 12:21:52 PM
Couple of interesting sell side notes on SD's valuation.

Ouch!

(http://a2.twimg.com/profile_images/57299498/homer-facepalm-icon_reasonably_small.jpg)
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on April 04, 2013, 01:18:53 PM
Couple of interesting sell side notes on SD's valuation.

Ouch!

(http://a2.twimg.com/profile_images/57299498/homer-facepalm-icon_reasonably_small.jpg)

Doh!
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 04, 2013, 01:48:09 PM
Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile
 
Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!
Title: Re: SD - SandRidge Energy
Post by: CorpRaider on April 04, 2013, 03:07:10 PM
Oh noes! Sell-siders!!
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 04, 2013, 03:57:28 PM
Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile
 
Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

We should thank them for bringing down the share price. If they are not retards, the market will be more efficient, and we will have less opportunity.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 05, 2013, 07:29:14 AM
Anyone got an idea at which NG price the West Texas Overthrust will begin to be economically viable ?
$6?
$7?



Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile
 
Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

We should thank them for bringing down the share price. If they are not retards, the market will be more efficient, and we will have less opportunity.
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 05, 2013, 07:58:53 AM
Anyone got an idea at which NG price the West Texas Overthrust will begin to be economically viable ?
$6?
$7?



Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile
 
Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

We should thank them for bringing down the share price. If they are not retards, the market will be more efficient, and we will have less opportunity.

I quickly went throug their past 10-Qs. They started losing money in 2009 Q1, after adjusting gain/loss on derivative contracts and impairment charges.
According to the chart here, gas started trading below $7 at that time.
http://online.wsj.com/mdc/public/page/mdc_commodities.html

This means the Texas Overthrust is likely going to worth zero for the foreseeable future.

However, since Missisipian Lime has 56% gas production, even if the overthrust doesn't work out, the NAV should still gain handsomely.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 06, 2013, 07:36:03 PM
:)

btw, not sure what's the "min" capex for SandRidge so that it can continue the oil production from its existing wells, and also
not to lose the drilling rights for most of its acreage (b/c I believe for most lease there will be such a requirement). Also, does anyone know how long is SandRidge 's lease in Miss ?

In fact I am also not sure what's the "min" capex for Chesapeake
The "min" capex will decide how long these folks can hang on, keep the value of its assets, and fight another day.

Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile
 
Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 06, 2013, 08:18:06 PM
ok. I do find very clear capex (drilling & lease maintenance capex) info for CHK in its latest presentation at
http://media.corporate-ir.net/media_files/IROL/10/104617/Latest_IR_Presentation.pdf
slide 17

not sure about SD though

:)

btw, not sure what's the "min" capex for SandRidge so that it can continue the oil production from its existing wells, and also
not to lose the drilling rights for most of its acreage (b/c I believe for most lease there will be such a requirement). Also, does anyone know how long is SandRidge 's lease in Miss ?

In fact I am also not sure what's the "min" capex for Chesapeake
The "min" capex will decide how long these folks can hang on, keep the value of its assets, and fight another day.

Cancord's target of $1 per share is quite brave

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

Couple of interesting sell side notes on SD's valuation.

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile
 
Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!
Title: Re: SD - SandRidge Energy
Post by: PhatKing on April 08, 2013, 06:18:24 AM
Well it looks like progress is being made rather swiftly in reducing costs - planes sold!!!!!. Appointment of David Lawler as COO seems to ensure that the Operations of drilling in the Mississippian play do not suffer or slacken. Since the future of SD (and its ultimate value) is highly dependent on the Mississippian play, ensuring that operations remain stable while the high level drama plays out is a smart move. First steps towards a reasonable outcome of this activism seem promising. 

http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1804069&highlight=


Title: Re: SD - SandRidge Energy
Post by: PhatKing on April 08, 2013, 07:03:34 AM
From now-on the future of SD depends on the development and execution of a/the strategic plan. So the principals/players making these decisions are important.

I also like the fact that there is Jim Brewer and Jeff Serota from SD in the Strategy and Planning committee. Jim, a geologist, seems to be one of the few members of the SD Board with direct experience that are relevant to the activities that SD will likely undertake as they get ready to grow and/or sell the company.

He is the founder of EnergyNet which offers "an easy-to-use oil and gas auction service that facilitates the sale of producing working interests (operated and non-operated), overrides, royalties, mineral interests, and non-producing leasehold", accoridng to the EnergyNet website (see below)

http://www.energynet.com/page/About_Us

Jeff Serota is a partner at the "Ares Private Equity Group " which  pursues opportunistic majority or shared-control investments, principally in under-capitalized middle market companies. We seek strong business franchises that have attractive growth opportunities, but are capital constrained in some way.", according to their website. So presumably he would have views on recapitalizing the debt at lower costs.

From the proxy, David Lawler appears very qualified.

"David C. Lawler. Mr. Lawler joined us as Executive Vice President – Operations in August 2011. Prior to joining the Company, Mr. Lawler served as Chief Executive Officer and President of PostRock Energy Corporation and its predecessor entities since August 2008 after having served as Chief Operating Officer of PostRock Energy Corporation’s predecessor entities from May 2007 through August 2008. Prior to that, Mr. Lawler was employed by Shell Exploration & Production Company from May 1997 to May 2007 in roles of increasing responsibility, most recently as Engineering and Operations Manager for multiple assets along the U.S. Gulf Coast. Mr. Lawler graduated from the Colorado School of Mines in 1990 with a Bachelor of Science degree in Petroleum Engineering and earned his Master of Business Administration degree from Tulane University in 2003".

These look like some reasonable moves in about 3 weeks, made by the new directors.
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 08, 2013, 07:50:56 AM
http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1


At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

I am over 5% for sure.  8)

Btw, I added some today.

We are WWAAAAYYYY over 5%!  Should I reallocate?   ;D  Cheers!

I added last week and now I have a 12% position.
I am a newbie investor and I am curious how you value junior oil companies like SD. Do you value it based on the NAV?
What I am thinking is that with the Permian sale, they get $1.6 bn net cash. They said drilling in Missisipian will likely get 40%-80% ROR. So if we have 60% * $1.6bn, we should get $0.96 bn per year from the drilling, so that give a PE of 2.5. Is this math right? Actually, I am thinking, if they do get this kind of ROR, it is not bad to draw the credit line  to do it. The credit line is just like 7% a year for interest, right?
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 08, 2013, 07:54:03 AM
From now-on the future of SD depends on the development and execution of a/the strategic plan. So the principals/players making these decisions are important.

I also like the fact that there is Jim Brewer and Jeff Serota from SD in the Strategy and Planning committee. Jim, a geologist, seems to be one of the few members of the SD Board with direct experience that are relevant to the activities that SD will likely undertake as they get ready to grow and/or sell the company.

He is the founder of EnergyNet which offers "an easy-to-use oil and gas auction service that facilitates the sale of producing working interests (operated and non-operated), overrides, royalties, mineral interests, and non-producing leasehold", accoridng to the EnergyNet website (see below)

http://www.energynet.com/page/About_Us

Jeff Serota is a partner at the "Ares Private Equity Group " which  pursues opportunistic majority or shared-control investments, principally in under-capitalized middle market companies. We seek strong business franchises that have attractive growth opportunities, but are capital constrained in some way.", according to their website. So presumably he would have views on recapitalizing the debt at lower costs.

From the proxy, David Lawler appears very qualified.

"David C. Lawler. Mr. Lawler joined us as Executive Vice President – Operations in August 2011. Prior to joining the Company, Mr. Lawler served as Chief Executive Officer and President of PostRock Energy Corporation and its predecessor entities since August 2008 after having served as Chief Operating Officer of PostRock Energy Corporation’s predecessor entities from May 2007 through August 2008. Prior to that, Mr. Lawler was employed by Shell Exploration & Production Company from May 1997 to May 2007 in roles of increasing responsibility, most recently as Engineering and Operations Manager for multiple assets along the U.S. Gulf Coast. Mr. Lawler graduated from the Colorado School of Mines in 1990 with a Bachelor of Science degree in Petroleum Engineering and earned his Master of Business Administration degree from Tulane University in 2003".

These look like some reasonable moves in about 3 weeks, made by the new directors.

I am just curious how many planes are sold and how much proceeds they got from it? TPG said the planes are worth like $100 M in total.
Title: Re: SD - SandRidge Energy
Post by: PhatKing on April 08, 2013, 11:57:19 AM
We will never know what they realized from selling the planes, as they are not likely to disclose it. But perhaps they may. But if TPG-Axon said $100 million, and, if they got only say $70 - $ 80 million, it is still a nice amount of change, allowing them to drill 20-25 more wells (at $3.1 million per well). With a ROR of 40%, than translates to $28 to $32 million earnings. Additionally the savings on pilot salaries, hanger fees, vacation use of corporate jets by CEOs etc will reduce the G&A line of the income statement. 

In a well run E&P company, NAV is a good proxy for value. And of course converting that NAV into revenues requires that wells be drilled. While the NAV for SD is higher than $5, using it to value for SD is a bit tricky. This is because the company is likely to change its strategy drastically from the one presented on the recent Analyst day (March 7th).  The current cash flow is so low that the new strategy is likely to reduce Capex, reduce rig count (below 82 rigs), and reduce the number of wells that are drilled (below the guidance given on the March 7th analyst day). This in turn will shrink the company; reduce revenues, income and cash flow. They have to get G&A under control so that the company generates more cash flow and allows more wells to be drilled and returns to profitability quickly. As to today’s value, I can come up with any number that I want. Even analysts are all over the lot – from $ 1 at Canaccord, $4 at BMO and $6.30 at Credit Suisse.

In my opinion, this is an investment whose rationale is really a bet on the jockey (Activist TPG-Axon and Mount Kellet), realizing that the horse is not “Secretariat” (Kentucky’s legendary thoroughbred – see the movie of the same name …. it is good one with Diane Lane).  The bet is that the jockey will stop the horse from bleeding, allowing the horse to continue to walk and gallop, instead of making the horse into a thoroughbred capable of winning the Triple Crown. If the horse walks then you can get $8-$10. If the horse can gallop then perhaps $10- $12 may be possible.  Of course this presumes that our jockey is really as capable as the resumes of the Prinicipals indicate.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on April 08, 2013, 12:05:58 PM
looks like fellow board memeber, MeVsEMT also established a position


http://www.mevsemt.blogspot.com/ (http://www.mevsemt.blogspot.com/)
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 08, 2013, 01:49:20 PM
looks like fellow board memeber, MeVsEMT also established a position


http://www.mevsemt.blogspot.com/ (http://www.mevsemt.blogspot.com/)

Wow this guy disclosed so much about his portfolio. I think he is trying to establish a track record to start a fund in the future, right?
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 08, 2013, 03:09:17 PM
I don't see much insider selling recently..
Title: Re: SD - SandRidge Energy
Post by: craigatk on April 10, 2013, 12:50:05 PM
I haven't looked at SD until today. Let me see if I understand the investment thesis correctly with this summary.

- Margin of safety is found in the discount between market price and estimate of NAV
- Hedge fund has taken control of board (TPG-Axon) and promises change
- Current mgmt is starting to change as a result, although still uncertainty around TW
- Asset wise, TPG-Axon in 1st letter, gave well researched valuation ~ $13 / sh.
- Asset wise, VIC nav calc from Feb 3 2012 shows similarity to TPG-Axon estimates.
- Asset wise, Permian Land sale has proven value to the upside ($2.6B achieved while $1.5B was estimated value by TPG-Axon, $3B estimated on VIC but I believe this includes cash-flow from production which was excluded? Fuzzy for me here.)

The activist funds being TPG-Axon (and Mount Kellet supporting) give me a positive impression. TPG-Axon is very sharp, so are the people's reputations behind Kellet. I believe they have put pretty conservative numbers into their NAV calc and you can see this in the Permian sale.

- finally in addition to the discount to NAV, there is the long-term estimate of the future value of the Mississipian Lime lands. What could they be worth if they can be drilled and put into economical production... that's more of a question mark but some estimates are quite high.
- Clarity on these numbers will rely on the new board as they push for cost controls and better capex.


Any thoughts? Am I starting to get the full picture?
Title: Re: SD - SandRidge Energy
Post by: craigatk on April 11, 2013, 11:09:48 AM
Upon further investigation, I also would like to add to my summary:

- 80% IRR promised by TW, faded into 40% IRR due to higher nat gas content in production wells (which are still very good numbers)
- TPG-Axon lowered NAV estimate due to this new info in second letter, closer to $10+
- CHK sold similar land at much lower prices than their mgmt estimated value, and lower than comparable SD transactions, meaning market is likely depressed with few buyers
- Sale was initially considered most likely outcome, considering SD's high cost of funding and the scale of capex required to fulfill 5 year land terms
- Full Sale may realize most value, but with depressed market, there may be a lack of buyers at acceptable prices
- Other options will likely be explored and strategic plans developed in next several months, could be part of the reason a deal was struck with TW
- Market dissatisfaction with TW and uncertainty around where this company is going (regardless of TPG-Axon proxy win) is pushing the price down
- Any announcements of positive news, resolution of TW situation, new strategic plans around funding, capex, expenses, and drilling wells profitably, could really push the stock up.

Quite an interesting idea. I'm also trying to envision the downside from here. What kind of news would make the stock go even lower? What kind of surprises are possible.
Title: Re: SD - SandRidge Energy
Post by: riju_easow on April 11, 2013, 01:09:27 PM
Dataroma indicates that there were a few insider sales (including a few millions by Mr Ward) in March.
Title: Re: SD - SandRidge Energy
Post by: fareastwarriors on April 11, 2013, 01:28:26 PM
Dataroma indicates that there were a few insider sales (including a few millions by Mr Ward) in March.


insiders transaction from capIQ, last 3 mo
Title: Re: SD - SandRidge Energy
Post by: zippy1 on April 11, 2013, 02:33:58 PM
Dataroma indicates that there were a few insider sales (including a few millions by Mr Ward) in March.


insiders transaction from capIQ, last 3 mo
I wonder whether this list give the picture of who plan to stay and who plan to leave?
Title: Re: SD - SandRidge Energy
Post by: Cardboard on April 11, 2013, 02:57:19 PM
"Quite an interesting idea. I'm also trying to envision the downside from here. What kind of news would make the stock go even lower? What kind of surprises are possible."

Lower oil prices. Considering also how many people on this board have expressed concerns about the economy and the market, it seems that if the S&P drops that oil will get hammered. This would result in revised NAV to the downside.

I am actually considering selling some if not my entire position. The upside appears limited, it is not like a triple or more. They keep finding more oil in the U.S. while the economy has shifted away from it with more renewables, cheap nat gas and much more attention to gas mileage on new cars. Even a degradation in the Iranian situation might not change things much since it seems we are seeing a decline in demand for oil globally.

The activists were really the driver to get quickly closer to NAV, but I don't know anymore. Selling a few planes won't do the job. They need to sell assets at high prices and the market is simply not there. CHK is a prime example. So, if it just becomes an oil play through the drill bit, then you have other choices in oil such as Suncor and trusts that pay big dividends.

It feels like a weak market will cut the price of this thing in half while a sale or some major positive surprise may give you a 50% pop from here. So it is kind of worrisome to sell because you are afraid to miss this potential gain, but on the other hand you could get a much better price once the market bubble pops.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: PhatKing on April 11, 2013, 03:42:52 PM
Thanks for the Insider trading summary. If we invert the question and ask if "the insiders are still holding a lot of shares?". Then I am surprised (and pleasantly so), that the 4 people (Rodney Johnson, Randall Cooley, Todd Tipton, Tom Ward) who sold after the Board and TPG-Axon signed the memorandum on March 13/14, still hold a vast majority of their shares. And a 5th person Wayne Chang actually purchased 10,000 shares at $4.99. So I conclude that insiders are still holding and presumably have the same views of the company today, as they held on March 12th, before the settlement with TPG-Axon.

As I said before, I believe that this is a bet on the jockeys led by TPG-Axon. Based on 13-F filings as of Dec 2012. Joining TPG-Axon is Leon Cooperman, Mount Kellett and Wally Weitz. Also Riverside/Carlyle holds lots of shares. If you look at the Riverside website, you can see that they have investments in many O&G companies. So they have domain knowledge in the O&G industry. Most of these guys manage pools of money with low turnover of holdings, and so it is likely that they will be holding their positions when we get the SEC filing reports for March 31st. All of the SD story (from March 12th) is still intact, unless there is further change in the "type curve" reflecting more gas and less oil, from wells drilled in the Mississippian play. In that case it will take longer for this story to play out, in my opinion. But based on the current expectations of oil/gas combination per well, 12-24 months is likely to be needed for this story to deliver robust returns. But meanwhile I feel I am in good company at a party that is yet to begin :)

Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?
Thanks.
Title: Re: SD - SandRidge Energy
Post by: compoundinglife on April 11, 2013, 04:02:12 PM
Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?
Thanks.

The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom.

Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours.

At the dinner Sam said something to tune of "we will make money on this but not as much as we would have with Tom". So it sounds like they are not getting out anytime soon, unless maybe there is a big move in the price.

If someone else who was there notices any inaccuracies of my account please point them out.
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 11, 2013, 04:15:35 PM
Tom may be a talent to identify oil assets with long term value,
but did ANYONE ask in the dinner or in the meeting how could FFH possibly tolerate all the crazy things (private jet, numerous family transactions, etc. etc.) Tom did in SD ?

quote author=compoundinglife link=topic=3427.msg112135#msg112135 date=1365721332]
Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?
Thanks.

The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom.

Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours.

At the dinner Sam said something to tune of "we will make money on this but not as much as we would have with Tom". So it sounds like they are not getting out anytime soon, unless maybe there is a big move in the price.

If someone else who was there notices any inaccuracies of my account please point them out.
[/quote]
Title: Re: SD - SandRidge Energy
Post by: PhatKing on April 11, 2013, 07:14:58 PM
Tom may be a talent to identify oil assets with long term value,
but did ANYONE ask in the dinner or in the meeting how could FFH possibly tolerate all the crazy things (private jet, numerous family transactions, etc. etc.) Tom did in SD ?


I would love to hear about the question raised by plato1976, since this is the mystery to me as well (and many others, I suspect). PW's reasons for overlooking the obvious ethical lapses, self-dealing, are a bit mystifying to say the least. A similar situation was present at CHK and no less than Lou Simpson was on the Board there, when Aubrey and Co were self-dealing with well interests etc etc.  Subsequently LS has been quite aggressive as Chair of the Nominating Committee in dealing with the situation and, AM is gone. Even WEB has said that he did not pipe up when he should have, at Coca Cola Board meetings. But subsequently he and Herb Allen went to Doug Iverson and essentially fired him (old 2004 story). But PW is an investor in SD, and so perhaps he thinks that TW's "visionary" attributes outweigh his lack of managerial skills. SD's performance since coming public raise questions about managerial competence as well.

The answer by FFH/PW that "we will make money on this but not as much as we would have with Tom" . In my opinion, this indicates that in their view, there is money to be made by holding at these prices (since FFH purchases are at prices higher than today's).
Title: Re: SD - SandRidge Energy
Post by: PhatKing on April 11, 2013, 07:17:39 PM
Sorry I messed up the way the post was posted ! Need to be careful!
Title: Re: SD - SandRidge Energy
Post by: compoundinglife on April 11, 2013, 07:48:51 PM
Tom may be a talent to identify oil assets with long term value,
but did ANYONE ask in the dinner or in the meeting how could FFH possibly tolerate all the crazy things (private jet, numerous family transactions, etc. etc.) Tom did in SD ?

To the best of my knowledge no one asked that directly. Sam did say that they had some issues with "compensation" and that Tom it seemed like those could be resolved.
Title: Re: SD - SandRidge Energy
Post by: Packer16 on April 11, 2013, 08:32:58 PM
Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

Packer
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 11, 2013, 08:54:52 PM
Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

Packer

I was outside by the book table during the entire Q&A, so was Tom actually present?  Cheers!
Title: Re: SD - SandRidge Energy
Post by: compoundinglife on April 11, 2013, 09:01:37 PM
Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

Packer

I was outside by the book table during the entire Q&A, so was Tom actually present?  Cheers!

Prem said he was there and motioned towards the audience area where the managers were sitting. I did not see him but I have only seen a picture of him so not sure I would recognize him in the flesh.
Title: Re: SD - SandRidge Energy
Post by: biaggio on April 12, 2013, 04:25:52 AM
Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

Packer

At least he was not up on the panel answering questions like last year. Now that would be awkward

Prem did say during the AGM that he was in the audience

 
Title: Re: SD - SandRidge Energy
Post by: Cardboard on April 12, 2013, 07:14:28 AM
Well... These comments from Prem that TPG-Axon will make money in the short term, but that Fairfax would have made more in the long term with Tom Ward AND that Tom was still there this year sitting along with Prem's lieutenants despite all the controversy tells me that a take-over of SandRidge with Fairfax involved is a possibility. You really have to ask yourself, what is the guy doing there?

I am not sure what Prem and company have in mind, but they seem to imply that if the company was run for the very long term that it could do quite well, but it would have to be done without the constant scrutiny of the public market.

However, this comment may detract from that logic:

"Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours."

Size is an issue for Fairfax to swallow all of SandRidge. In any case, if Tom proposes ways to keep the company under his control with Fairfax to participate in a substantial way, they may be quite interested.

Cardboard
Title: Re: SD - SandRidge Energy
Post by: Philip Morris IV on April 12, 2013, 08:22:16 AM
What are the issues with TW & Co. aside from the excessive compensation?  I mean - is there a chance the new board and TW could negotiate a reasonable comp package and keep him onboard?
Title: Re: SD - SandRidge Energy
Post by: T-bone1 on April 12, 2013, 09:01:23 AM
Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

Packer

I was outside by the book table during the entire Q&A, so was Tom actually present?  Cheers!

If he was, he was well disguised (or perhaps in the upper balcony with some of the overflow)
Title: Re: SD - SandRidge Energy
Post by: mrvlad0 on April 13, 2013, 03:28:28 AM
Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?
Thanks.

The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom.

Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours.

At the dinner Sam said something to tune of "we will make money on this but not as much as we would have with Tom". So it sounds like they are not getting out anytime soon, unless maybe there is a big move in the price.

If someone else who was there notices any inaccuracies of my account please point them out.

That language above feels as though TPG is looking for short term gain (Sale of company) versus holding on long term with TW.
Title: Re: SD - SandRidge Energy
Post by: compoundinglife on April 13, 2013, 10:29:36 AM
Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?
Thanks.

The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom.

Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours.

At the dinner Sam said something to tune of "we will make money on this but not as much as we would have with Tom". So it sounds like they are not getting out anytime soon, unless maybe there is a big move in the price.

If someone else who was there notices any inaccuracies of my account please point them out.

That language above feels as though TPG is looking for short term gain (Sale of company) versus holding on long term with TW.

That is the point they were trying to get across. I think Prem was also trying to make a point with regards to activism in general and how it tends to be in his view short cited. As a result you make some quick money but you end up leaving lots of money on the table.

Sure you can jump in turn some knobs, adjust some levers and rack up a quick gain.
But if you are willing to take some punches up front and not focus on short term results you can end up with superior results.
Title: Re: SD - SandRidge Energy
Post by: txlaw on April 13, 2013, 10:38:05 AM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 
Title: Re: SD - SandRidge Energy
Post by: compoundinglife on April 13, 2013, 10:47:28 AM
Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing.

Yeah it was very clear they really like TW.

Sam mentioned multiple times during the dinner Q&A that for these plays you need to ensure you get high quality "rock" and getting stuck with low quality rock is how you fail. So as the saying goes "if you don't know jewelry know the jeweler" and I think they consider TW and team to be their jeweler in this context. 
Title: Re: SD - SandRidge Energy
Post by: txlaw on April 13, 2013, 10:54:45 AM
Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing.

Yeah it was very clear they really like TW.

Sam mentioned multiple times during the dinner Q&A that for these plays you need to ensure you get high quality "rock" and getting stuck with low quality rock is how you fail. So as the saying goes "if you don't know jewelry know the jeweler" and I think they consider TW and team to be their jeweler in this context.

Yup.  Both TW and Aubrey McClendon where awesome landmen, which is how they built CHK into what it is today.
Title: Re: SD - SandRidge Energy
Post by: Cardboard on April 13, 2013, 06:31:35 PM
"The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom."

You see, that sounds very awkward to me. When you have a good idea, that will work really well in the long term, that you truly believe in and that you have spent a fair bit of time and energy on it, then why in the world would you simply hand out the keys of the company to an outsider who owns only 7 or 8%?

That is exactly what Fairfax and Tom Ward have done. They didn't fight. Fighting in my view is not going in front of a judge to prevent a consent solicitation from the hedge fund guys. No, it is about defending your view in public and explaining in clear terms what is the plan and how this will deliver more value for shareholders than what is being proposed by the hedge fund guys. If this had been done and the plan looked credible, then it is quite possible that shareholders would have supported Ward and tossed the hedge fund guys.

The reality or this accusation of short termism vs long termism is quite different.

First and as I mentioned, I could not see any kind of cohesive long term plan for this company. It was all about we drill the Mississippian play like crazy and trust us, money will abound afterwards. Simply looking at the history of SandRidge made you take a step back. There was the shift in focus from gas to oil, then $1.2 billion spent on a weird acquisition in the Gulf of Mexico, then suddenly the crown jewel is sold for a decent, but still average price to reinforce the balance sheet and to reinvest it all in the Mississippian. Through all of this, where was the growth in NAV per share or cash flow per share?

Second, you have an operator that is paid large salaries and bonuses, has private planes like it is a multi-national, the company is blowing money on a basketball team and there are family dealings going on with his son's company. It is no wonder that the hedge fund was able to attract investors attention who had seen their share price do terrible over the long term while such behavior was going on.

Regarding short termism, I am really curious to see what TPG-Axon will be able to do to make money in the short term since they likely paid at least 20% more than the current price. My view is that it will take a lot longer than what is being described by Mr. Watsa to straighten up this company and get some cash flow to be visible or to find buyers for a proper amount, so that all shareholders can finally experience a decent gain.

So if there was such a strong belief in long termism and that short termism is such an evil and such a bad route to take then I wonder why words were not transformed into action?

Cardboard
Title: Re: SD - SandRidge Energy
Post by: rogermunibond on April 15, 2013, 03:42:01 PM
http://seekingalpha.com/article/1342401-mississippian-lime-encana-narrows-focus-to-just-82k-acres-in-osage-extension-area-acreage-did-not-meet-expectations

Encana is focusing on OK prt of this play and that means a lot of the KS acreage that SD calls the extension is getting ignored.  Looks like the higher NG content of this extension play is making it uneconomic.  Maybe SD's cost is low enough that it still generates a positive IRR.

Other thing to note is that the Nemaha Ridge part of the Miss Lime is now the sweet spot of the play and while SD has some acreage there it is mostly a DVN and RRC controlled area.

So while Sam Mitchell says it's all about the rock, we are finding that some of the Miss Lime rock is a lot better than other parts of the rock.  And it looks like SD missed on the sweet spot.
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 15, 2013, 04:04:08 PM
http://seekingalpha.com/article/1342401-mississippian-lime-encana-narrows-focus-to-just-82k-acres-in-osage-extension-area-acreage-did-not-meet-expectations

Encana is focusing on OK prt of this play and that means a lot of the KS acreage that SD calls the extension is getting ignored.  Looks like the higher NG content of this extension play is making it uneconomic.  Maybe SD's cost is low enough that it still generates a positive IRR.

Other thing to note is that the Nemaha Ridge part of the Miss Lime is now the sweet spot of the play and while SD has some acreage there it is mostly a DVN and RRC controlled area.

So while Sam Mitchell says it's all about the rock, we are finding that some of the Miss Lime rock is a lot better than other parts of the rock.  And it looks like SD missed on the sweet spot.

I think it's too early to say anything.  There are massive amounts of area still to be drilled.  The ending of the article pretty much states as much:

While the Miss Lime play may end up redefined, at least for the time being, with a much tighter contour, its size still remains enormous. The ongoing highgrading of drilling inventory around the most productive sweet spots is a natural and necessary process. The good news, the play may start to deliver much stronger operating reports from select areas and may surprise to the upside with a regained momentum.

Cheers!
Title: Re: SD - SandRidge Energy
Post by: ASTA on April 16, 2013, 04:04:29 AM
Well I doubled down yesterday and have 14% at 5.22.
I hope this does not turn out like one of my first investments HPQ down 70% (sold at down 45%)
According too my observations NG should be going up with Australia halting LNG projects and allot of other Gurus are investing in this space. 
Its also a new take on my position system where as I have 7% first and if my research becomes more favorable I can double.
And a 7% position is able to move the needle as well.
Thanks for everyone posting on this specific stock to.   
Title: Re: SD - SandRidge Energy
Post by: tombgrt on April 18, 2013, 09:09:09 PM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 18, 2013, 10:36:37 PM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: plato1976 on April 18, 2013, 11:03:00 PM
yep, they are the indirect reason Tom said Permian; however, they don't like it as TPG once said. TPG liked this asset

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 19, 2013, 08:32:09 AM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.
Title: Re: SD - SandRidge Energy
Post by: tombgrt on April 19, 2013, 08:42:58 AM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!


I agree, looks like he's a capable and rational guy and his actions up to this point say a lot.

It's odd to see the stock tanking given the latest evolutions. Sure oil has dropped a bit these last few days but on the other hand NG is suddenly at $4.4!

Bought some jan'14 this morning, equal to half my common position.
Title: Re: SD - SandRidge Energy
Post by: craigatk on April 19, 2013, 09:52:39 AM
I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

He could rise so quickly because he was making money hand over fist within GS Principal Strategies. This was a 100% proprietary investing group that was on the Equities side of the business. They were basically an internal hedge fund that came out of the risk arbitrage desk culture. Remember the desk that Robert Rubin, ex-Treasury Secretary used to run? It has been one of the greatest sources of training for future hedge fund managers that has ever existed. I visited GSPS once in their Tokyo office, I guess it was in mid-2009, before they split off to GSAM. They had their own private office with notices "GSPS employees ONLY" posted to the door. Basically to keep compliance happy and them separated completely on a different floor, behind a closed door from the client facing businesses. This global team was running many billions of GS's internal capital and by most accounts making exceptional returns. Things have changed. Part of the group was spun out into the asset management business, where it still runs billions of Goldman's money, along side client money. The other part continued but has been reportedly shut-down since then due to the no-prop trading bank rules. A hedge fund client of mine (I used to be a headhunter) once distributed a ranking of hedge fund targets for recruiting. It was a sort of A-B-C target list that they would consider for interviews. The A-List was basically all hedge funds that were started by ex-GSPS people. I'm don't know anything particular about Dinakar Singh whether he is stand up individual or worth of respect, but in terms of his understanding of risk, capital allocation and how to make absolute returns, he has my utmost respect.
Title: Re: SD - SandRidge Energy
Post by: Parsad on April 19, 2013, 10:07:13 AM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

Not sure about his days at GS, but his fund has returned about 60% between 2006 and 2012.  He's a good investor...not spectacular, but good.  Cheers!
Title: Re: SD - SandRidge Energy
Post by: Poor Charlie on April 19, 2013, 02:03:55 PM
In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?


Yesterday I bought a small position.

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

Not sure about his days at GS, but his fund has returned about 60% between 2006 and 2012.  He's a good investor...not spectacular, but good.  Cheers!


TPG-Axon is not a typical long/short fund that puts on single name longs/shorts based on the individual merit of each idea.  My understanding is they build hedges directly into each long.  Many funds do this (basically a pairs trade) but TPG-Axon is unique in that they spend a lot of effort looking for more creative or bespoke hedges.   Think of something like long subprime mortgage originators long subprime CDS.  I would imagine they have built hedges into their SD position that significantly alter the risk/return dynamics from simply being long the stock.

The person in this situation (SD) I find really interesting is Mark Mcgoldrick (Mount Kellett).  The guy used to be a rainmaker at GS’s special situation desk.  Anyone who is given the moniker ‘Goldfinger’ at a place like GS is someone worth following.  I believe before he left he was paid more than Blankfein.
Title: Re: SD - SandRidge Energy
Post by: Cardboard on April 19, 2013, 05:25:09 PM
So in terms of hedging this long position in SD what do you think they could have done? I can see short natural gas, short oil, short CHK. Just curious as to how complex you have in mind for these guys. Thanks!

Cardboard
Title: Re: SD - SandRidge Energy
Post by: muscleman on April 21, 2013, 08:15:39 AM
So in terms of hedging this long position in SD what do you think they could have done? I can see short natural gas, short oil, short CHK. Just curious as to how complex you have in mind for these guys. Thanks!

Cardboard

I am not sure longing SD and shorting nat gas is a good idea. Recently SD has tanked a lot and nat gas has jumped up a lot.
I think a pure long SD position is fine for me because SD itself has hedged the oil and gas prices.
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 21, 2013, 11:15:10 AM
did they actually hedged gas as well?
Title: Re: SD - SandRidge Energy
Post by: Redskin212 on April 21, 2013, 03:58:53 PM
People should be aware that SD's hedging program was heavily influenced by Prem and Hamblin Wasta.  I recall a couple of years ago an the FFH annual meeting that SD had put hedges on through 2014 and his comment was "we would be hedged all the way through 2015 or 2016 if Prem had his way" 
Title: Re: SD - SandRidge Energy
Post by: alertmeipp on April 22, 2013, 07:48:04 PM
On Miss Lime. A good read.

http://www.worldoil.com/March_2013_mississippi_lime.html
Title: Re: SD - SandRidge Energy
Post by: CorpRaider on April 24, 2013, 12:37:54 PM
Bought some Jan '14 LEAPS so I can share in the fun with you guys. 
Title: Re: SD - SandRidge Energy
Post by: Cunninghamew on April 24, 2013, 02:39:53 PM